How a Trading Bot Made $6.8M on Pump.fun Memecoins, What Strategy Did The Bot Use

Traders are increasingly using bots to automate their strategies. On Monday, November 25, Lookonchain reported that one bot made substantial profits on Pump.fun. Over the past month, the bot made 27,000 SOL, or $6.8 million. 

For instance, on November 23, the bot invested 2 SOL to buy 57 million FATHA tokens. Soon after, the bot sold these tokens for 4,456 SOL, which is a 2,227x return. Just two days later, the bot bought 58.57 million FRIC tokens for 1.75 SOL. Later, the bot sold these tokens for 1,646 SOL, a 943x return. 

Bot’s trading patterns suggest that the strategy was a “SPRAY and PRAY” method. This means that the bot invested small individual amounts into a large number of projects. This strategy expects that these tokens will return outsized returns. 

The strategy relies on selecting small-cap tokens that have significant upside. These tokens are selected for their potential. While the exact criteria for selection is not known, it likely relies on some user engagement metrics. 

The strategy relies on a large failure rate for individual investments. Traders who use this strategy know that the vast majority of their investments will fail. They also know not to sell a winning token as soon as it goes up, as these tokens have to compensate for all the failed investments.