What is BananaGun? Opportunities and Risks of BANANA
Last year (2023), the Huali Huawai team had already helped everyone sort out some articles about the TG Bot topic, and we made some simple comparisons of popular bots at that time, such as Unibot, Maestro, Wagie Bots, and Banana Gun. As shown in the figure below.
At the beginning of this month (August), a friend suddenly messaged me on WeChat asking about Banana Gun. He said he bought BANANA for over 60, and after buying it, the price started to drop, eventually falling to around 40, and he was stuck with it, asking me what he should do.
According to my previous habit, I would usually ask two questions first: What percentage of your portfolio did you use to buy? Can you list three reasons why you decided to buy this coin?
However, I didn't ask those questions at that time; I simply replied: The price of this coin on Binance (before July 20) had reached over 50 dollars, so buying at 60 shouldn't be a big issue. This project doesn't have any large unlocks, and the market share and active user data are all fine. Since you bought it, it shows you are optimistic about it, so just hold on and see. There's no need to cut losses at this stage of the market.
I guess this friend just wanted to seek some psychological comfort from me, just like a line in "The Convenience Store of Worries" says: In fact, those who are entangled in making choices already have the answer in their hearts; they just want to get the choice that aligns with their inner inclination.
But everyone has experienced the subsequent market trends. After the crash on August 5 (805), many altcoins saw significant declines, with BANANA dropping to around 29 dollars at its lowest. As shown in the figure below.
I estimate that during this period, if the aforementioned friend kept an eye on the market changes, he might have been continuously experiencing psychological torment. However, since the crash on August 5, I have observed the rebound strength on the list, and under the influence of several new positive news (token burn, Binance listing contracts), BANANA's rebound speed and amplitude have been relatively strong. Yesterday (August 17), it also rose back to around 61 dollars. However, at this stage, the volatility of various altcoins remains quite large, and if one cannot bear such high volatility risks, it is advisable not to participate casually.
1. What is BANANA?
Regarding the introduction of the Banana Gun project, there has been relevant content sorting in previous articles by Huali Huawai, and here we will briefly review it:
- Project Overview
Banana Gun is a trading bot based on Telegram, designed to protect users from specific types of scams and vulnerabilities, such as MEV (the core attack method of MEV is sandwich attacks, which exploit users' urgency to buy tokens by increasing slippage during transactions, allowing the bot to match the optimal transaction order and execute trades ahead or identify arbitrage opportunities; currently, about 30% of blocks on Solana are MEV blocks) and rug pulls (a common type of fraud in the crypto space, where a crypto project suddenly abandons its investors after accumulating a large amount of funds). In addition to providing protection against MEV, it also offers flexible trading opportunities through features like sniper functionality, slippage control, and automatic limit orders.
The so-called sniper functionality refers to helping traders quickly buy or sell assets at specific points in time, especially when a project launches, to capture the best market opportunities. Slippage control and limit orders allow users to set a maximum expenditure to limit the amount of tokens and gas they are willing to spend. When dealing with tokens that have a maximum transaction volume, the token contract code restricts the maximum quantity that can be purchased in a single transaction. If the maximum allowed transaction volume is reached, the remaining ETH will be refunded to the user. If the transaction cannot meet the maximum allowed purchase amount, it will be automatically canceled.
- Token Economics
The native token of Banana Gun is BANANA, which is a deflationary token with a maximum supply of only 10 million. The current total supply is approximately 8,900,000, with a circulating supply of 3,220,000 (about 32% of the total token supply). The specific distribution is shown in the figure below.
The term deflation primarily refers to the fact that BANANA has a burn mechanism, with a planned total burn of 1.1 million tokens, accounting for 11% of the maximum token supply. A few days ago (August 14), Banana Gun announced that it burned 200,000 tokens, which is 2% of the total supply. As shown in the figure below.
Let’s also review the presale part. Initially, they planned to raise 800 ETH in the presale, with a limit of 1 ETH per wallet. The presale was conducted on a first-come, first-served basis and was divided into 4 rounds (the first three rounds had certain conditions, and the fourth round was open to all users who had used the Banana Gun wallet). The highest return on investment for participants in the presale was 121 times, as shown in the figure below.
- Application Aspects
Banana Gun itself has a certain revenue-generating capability because users need to pay a 1% fee when using the sniper function, while using manual buy/sell and limit functions incurs a 0.5% fee (1% for chains other than Ethereum).
Additionally, they will have a revenue-sharing, rewards, and buyback model, which means:
40% of the transaction fee revenue will be directly distributed to BANANA token holders (can be claimed through the official dApp).
Users will receive BANANA tokens as rewards for every transaction made using Banana Gun, with the amount determined by the fee * multiplier X (X ranges from 0.05 to 1, and the team will adjust it based on market conditions, also claimable through the official dApp).
Besides the revenue-sharing from trading taxes, part of the funds entering the treasury will also be used to buy back BANANA tokens.
This seems to create a positive feedback loop.
- Market Share
Looking at the trading volume over the past 7 days, Banana Gun's trading volume is around 100 million, accounting for 18.5%, as shown in the figure below.
As the popularity of MemeCoins on chains like Solana continues, various Bots also maintain active on-chain activities, which will further increase the income share of BANANA holders (the aforementioned revenue-sharing model). However, it is important to remind that one should not hold BANANA solely for the sake of obtaining this reward unless they can also bear the market price volatility of the BANANA token itself.
2. What other opportunities does BANANA have?
In addition to the token economics and business model mentioned above, from a short-term development perspective, BANANA seems to have done some foundational work in terms of liquidity.
A few days ago (August 15), I saw an announcement from Binance stating that they had launched perpetual contracts for BANANA, with leverage up to 50 times. As shown in the figure below.
Although I no longer engage in any leveraged operations, the launch of BANANA perpetual contracts on Binance is definitely a bullish factor for the project, as it essentially meets the demand for leveraged betting. A bullish environment will likely increase the trading volume and revenue-sharing for BANANA holders, further enhancing the fundamental value (price) of BANANA.
Additionally, before being listed on Binance, BANANA's trading volume was only 2 million dollars, while its current trading volume is nearly 200 million dollars, indicating an increase in the token's liquidity. People can now invest (trade) with smaller slippage, which is certainly a favorable condition for BANANA.
3. What potential issues might BANANA face?
From the full bloom of the Telegram Bots concept last year (2023) to the FOMO effect driven by the popularity of MemeCoins, various Bots have undergone a period of market baptism and have now formed a certain pattern.
- Competitor Aspects
Although Banana Gun's current development looks good, it also faces competition issues, and each Bot has its own core characteristics. For example, Banana Gun focuses on the success rate of trading sniping and profit management, BonkBot emphasizes trading automation and private key security, Maestro performs well in trading operations and risk prevention, Pepe Boost offers various advanced features (such as anti-sniping mode, automatic follow orders, and smart money tracking), Trojan has good monitoring capabilities for new trading pairs on-chain, and Unibot has rich data support and multi-chain operation capabilities…
In short, each has its own characteristics, and at this stage, it is difficult to say who can eliminate whom.
- Security Aspects
In previous articles by Huali Huawai, whenever the use of trading bots was mentioned, my first suggestion was always not to use your main wallet with large funds; it is best to import a new wallet or create a wallet for use.
Because, in terms of Bots themselves, various trading bots still rely on centralized servers and team management methods, which are not the decentralized applications we understand. On one hand, if the server where the project is located is attacked by hackers, it can pose a certain risk to the security of user wallets and funds. On the other hand, centralized team management (some of which are anonymous teams with undisclosed identities, such as Banana Gun) does not rule out the possibility of developers or project managers abusing certain permissions for personal gain (such as directly stealing user assets or monitoring user transactions to front-run trades).
Private key = assets. Since trading bots store users' wallet private keys on their centralized servers, there will definitely be certain security risks.
Let’s briefly review some security incidents that have occurred before:
On September 12, 2023, a vulnerability was discovered in the Banana Gun token contract that could not be urgently fixed, causing its token price (which could be traded via Uniswap at the time) to plummet rapidly, almost reaching zero just over an hour after launch. As shown in the figure below.
On October 25, 2023, Maestro suffered a router breach, resulting in the theft of assets from 280 users, with losses amounting to 500,000 dollars.
On October 31, 2023, Unibot experienced a vulnerability exploitation, where attackers used an "arbitrary call" vulnerability in the Unibot router contract to transfer tokens worth 640,000 dollars that had been pre-authorized to the router contract into their own accounts.
On April 2, 2024, Solareum (a trading bot based on the Solana chain) announced its permanent closure due to insufficient funds and security vulnerabilities.
In addition to the risks mentioned above, another major category of risks facing various Bots is phishing issues. Currently, there are many fraudulent bots or counterfeit tools online (almost identical to Banana Gun) that induce users to import their wallet private keys to directly steal their assets.
In summary, in a 24/7 trading market, various Bots applications can indeed provide users with better trading convenience and improve trading efficiency as a supplement to current CEX and DEX. However, they also face some potential risks. Moreover, as the popularity of MemeCoins fluctuates, people's demand for trading bots will also return to rationality. Whether for short-term speculation or long-term investment, if you are indeed optimistic about a project, you can participate appropriately based on your risk preferences and position allocation. Otherwise, the old saying still applies: Do not attempt to risk large amounts of capital unless you are mentally prepared to lose that money.
We will stop here for this issue. For more content, you can check the Huali Huawai homepage.
Disclaimer: The above content is just personal opinions and analyses, intended for learning records and communication purposes only, and does not constitute any investment advice. The crypto space is a high-risk market, and many projects carry the risk of going to zero at any time. Please view it rationally, do not engage if you do not understand, and take responsibility for yourself.
