[DEX MASTERY SERIES] - Part 4: Key Factors to Consider When Setting a BOT for Sniping/Trading
💼 Wallet: BOT usually provides users to create new wallets or import their existing ones (ideally, a cloned wallet). It is advisable to change wallets periodically to avoid situations where a connected wallet can be drained by a scam website.
💸 Tip: For transactions to be included on-chain, they need validation to be added to a block. Validators, who run nodes, validate transactions and earn fees. In case multiple transactions with the same token value are sent simultaneously, the more profitable transaction is GIVEN PRIORITY. The tip is what you're willing to pay to "lobby" validators for priority.
💰 Gas fee: This is the fee paid to chains for executing transactions or interacting with smart contracts. Fewer users have delved into Gas fees since the rise of bots (excluding #BRC20 and #ERC20 cases).
🏃♂️ Slippage: During token trades, especially initial listings, slippage can occur due to volume surges. This is particularly common during high FOMO deals and can cause prices to fluctuate rapidly. To avoid this, adjust the slippage to a comfortable percentage, ensuring purchases are made within your specified maximum slippage rate.
For example, if you intend to buy token X at 10 $BNB / token X, setting the slippage to 10% means that you are willing to buy at 11 $BNB / token X.
📌 Note: Depending on your chain and pair, prepare the right crypto stash - $ETH for @ethereum, $SOL for @solana. Keep ENOUGH BALANCE to cover gas, tips, and volume for both buy and sell orders. It sucks to cop a token and then be strapped for cash when it's time to flip it.🤡
🤖 Anti-MEV: This prevents sandwich attacks by running transactions through a private node before submitting to the chain (I will have another post about it 😎). The decision to activate this feature is subjective, with ongoing debates about its impact on transaction speed.
👉 Part 5 will guide you on using BOTs on @solana - the sizzling meme chain that's been making waves for a good while!