Key Takeaways
- Initial investment and exploration of Uniswap.
- Development of a 'sniping' strategy utilizing the mempool.
- Exploiting opportunities on Polkastarter for substantial gains.
- Expansion to Binance Smart Chain (BSC) and capitalizing on the memecoin craze.
- Building sophisticated infrastructure to accelerate sniping operations on BSC.
- Unexpected profits from forgotten token holdings.
- Insights and lessons learned from the world of high-risk cryptocurrency trading.
Genesis of the Strategy
In August 2020, amidst the nascent recovery from the COVID-19 induced market downturn, my brother and I embarked on our cryptocurrency journey. Starting with a modest portfolio of $50,000, we began exploring opportunities beyond conventional investment avenues. We had modest success on Binance Launchpad, but then heard about Uniswap, where friends were rapidly gaining multiples of their investment trading new, often obscure tokens.
The Art of Sniping
We were quickly introduced to the concept of "sniping" new tokens as they were listed on DEXs. The stories of bots making hundreds of thousands of dollars off the initial liquidity injection were astonishing. We began to research the mechanism and build our own approach.
Early Attempts and Refinements
While on vacation, my brother, with his background in IT, started learning Solidity to craft our first sniping bot. Our initial target was YMPL. We pooled around 50 ETH (approximately $20,000) and successfully sniped 8% of the initial supply. Selling this position within 30 minutes yielded a profit of 60 ETH (approximately $30,000). This early success fueled our ambition.
Leveraging Mempool Data
Through research and experimentation, we discovered the advantage of monitoring the Ethereum mempool. By observing pending "add liquidity" transactions, we could submit buy orders with the same gas fees, aiming to have our transactions included in the same block as the liquidity addition. This allowed us to gain an advantage over slower participants.
Polkastarter Opportunities
As the ecosystem evolved, Polkastarter emerged as a new platform for token launches. We identified a loophole in the SpiderDAO launch, allowing us to purchase a significant portion of the initial supply, resulting in a $500,000 profit.
Binance Smart Chain Expansion
Recognizing the potential of the Binance Smart Chain (BSC), we expanded our operations to this ecosystem. By targeting newly listed memecoins, we achieved substantial returns. One memorable trade, MATTER, resulted in a profit of 2000 BNB.
Infrastructure Development
To optimize our sniping operations on BSC, we invested heavily in infrastructure, deploying 150-200 nodes. This allowed us to achieve superior speed and reliability, creating a significant barrier to entry for smaller players.
Unexpected Windfalls
In August 2021, we stumbled upon a remarkable opportunity. We discovered that some of our blacklisted wallets still contained EVN tokens, which had experienced a significant price surge. By selling these tokens, we realized an unexpected profit of $6 million.
Conclusion: Lessons in High-Risk Trading
This journey has been an extraordinary experience. Starting with limited capital and knowledge, we navigated the complexities of the cryptocurrency market to achieve substantial financial success. It required constant innovation, relentless effort, and a willingness to embrace risk. While these opportunities may not last forever, the lessons learned will remain invaluable.
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