Unibot (UNIBOT) token was among the top crypto gainers in July as its price rallied by 400% in a month to reach an all-time high of $199.90 on July 28. The project defied the market’s negative trend as both Bitcoin (BTC) and Ethereum (ETH) dropped by nearly 4%.
However, by August 3, 2023, the token's price retraced 44% from its peak, leading to doubts about whether this surge was merely a fleeting trend. Nevertheless, it is essential to consider the project's fundamentals, which seem to suggest otherwise.
The project is a harbinger of a newfound bullish narrative around decentralized Telegram bots for trading on DEXs. The total market capitalization of the sector surged above $150 million from around $20 million at the start of July, per Coingecko.
While a number of copycats have launched in the market, Unibot has a dominant market share, with 72.3% of the total market for decentralized Telegram bots for trading on DEXs. Since May 2023, Unibot has gained popularity with increased usage and price.
It provides features such as limit orders, MEV protection and snipping. Snipping enables instant purchase of newly listed token pools on Uniswap, which is preferred among high-frequency traders.
Unibot has become popular among sophisticated DeFi users, reflected in its increased usage. The token has a low PE ratio compared to other DeFi protocols, providing fundamental strength to its price despite the astronomical price surge.
Telegram bots trading could be a lucrative DeFi niche
Although Unibot's design may not be revolutionary or feature any technological breakthroughs, the Telegram bot offers a superior trading experience on Uniswap, making it increasingly popular among traders.
Unibot’s trading volumes nearly tripled in July, reaching a high of $7.63 million on July 23, per a Dune dashboard.
Uniswap bot trading volumes. Source: Dune
The cumulative user base of Unibot crossed 7,000 unique wallets as the bot’s usage continued to grow.
Unibot developing team has also announced a new iteration of the bot on July 21, Unibot X, which comes with mobile compatibility, a better user interface, and advanced features.
The number of unique users interacting with Unibot. Source: Dune
On top of that, its tokenomics project has strong yields for token holders due to its revenue-sharing model with a fixed supply of tokens. A fixed supply eliminates dilution risks in the token from investor or private sale tokens.
The UNIBOT token is actually a governance token that receives 40% of the bot's revenue in trading fees and access exclusive features.
Currently, it projects an annual yield of 49.1% and has a profit-to-earning (PE) ratio (the ratio of the token's fully diluted market capitalization and annualized earnings) is 2.91. A lower PE ratio means higher earnings relative to market price.
UNIBOT’s PE ratio is more favorable than most DeFi tokens which have a PE ratio of 20 or higher. For instance, MakerDAO (MKR) has a PE ratio of 20, while GMX, a leading real-yield platform, gives a PE ratio of 35.85 per Token Terminal data.
Related: Telegram Wallet bot enables in-app payments in Bitcoin, USDT and TON
However, the project entails smart contract risks, as multiple contracts interact with Uniswap to execute trades via Telegram, increasing the attack vector for hackers.
The Unibot and other Telegram bots store the private keys of its user wallets, which may become vulnerable to theft.
UNIBOT market analysis
After reaching a peak value of $199.80 on July 28, UNIBOT's price dropped by over 30% in a week, likely due to early buyers rushing to take profit and some FOMO buyers panic selling.
Nevertheless, given that strong fundamentals back the token, so far, the uptrend doesn’t seem like a pump-and-dump scheme.
Nansen’s analysis shows that the UNIBOT token has a “diversified token ownership, long-term holders are taking some profits and smart money is growing.”
The on-chain analytics firm tweeted that “19 smart money addresses own more than 50 Unibot,” which represents their interest in revenue sharing. Smart money wallets represent prolific and highly profitable traders.
Exchanges like Huobi, Gate and Bitget also hold significant amounts of UNIBOT tokens. Nansen’s tweet also reported that on-chain movements show one “address funded by Binance, which has been buying relatively small amounts of UNIBOT consistently,” which could allude to listing on Binance.
The UNIBOT has rebounded from support around the July low of $100.86. If the buyers continue to build support above this level, UNIBOT’s positive rally could continue as usage increases.
UNIBOT price action. Source: CoinGecko
While Unibot’s fundamentals and on-chain distribution of the token look promising, the project faces
Nevertheless, if the worst doesn’t happen, Unibot’s utility and real yield from the UNIBOT token will likely continue to push its price higher.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.