Bitrabo Editorial
As interest in cryptocurrencies surged in recent years, particularly since late Q3 2024, there has been a notable increase in the exploration of low-fee and scalable alternatives to Ethereum. Platforms like Solana have gained popularity due to their ability to support inexpensive smart contract deployment while maintaining trustworthiness and reliability.
Rationale Behind Bot Activity
Despite the appeal of Solana and certain Ethereum layer-2 solutions, these networks have become hotbeds for bot activity. The minimal fees on Solana have led to a rise in both constructive and malicious bot engagement, prompting scrutiny from analysts.
Some argue that bots play a vital role in fostering the overall ecosystem’s growth, contrary to the common perception of them being mere “spam” or not genuine contributors. According to an analyst, bots are essential for generating liquidity and optimizing market operations, ultimately bolstering the ecosystem’s stability.
The analyst emphasizes that bots, including those on public chains like Solana, should not be viewed as disruptive elements but rather as integral components. Since all on-chain activities entail transaction fees, bots contribute to network health by paying these fees, akin to organic users.
In traditional finance, bot activity constitutes a significant portion of trading volume, serving as sophisticated tools utilized by institutional traders for efficient trading. Drawing parallels, the analyst suggests that on-chain bots should be regarded as analogous to traditional finance’s “algos,” playing a crucial role in sustaining liquidity and market efficiency.
Concerns Surrounding MEV Bots and Solana Foundation’s Response
While beneficial bots enhance the ecosystem, the presence of Maximal Extractable Value (MEV) bots, particularly on platforms like Solana, poses a threat. These bots exploit market inefficiencies to maximize profit, potentially undermining trust and fairness.
Despite adding liquidity, MEV bots prioritize individual gains over ecosystem welfare, contrasting with other constructive bots. In response to this issue, the Solana Foundation took action by banning over 30 validators accused of enabling MEV bots on the network.