The sacred scam bots

Lately, I’ve been seeing a lot of advertisements shouting “Earn! Earn! Earn!"—with or without an AI bot, zero risk, and so on. But as a blockchain developer, I know what it actually takes to build even the simplest trading bot and how much risk is involved in trading.

That’s why I’ve decided to start a series of articles titled “What are blockchain trading bots?” The first article in the series is called: “The Sacred SCAM Bots.”

0. Introduction

DeFi trading bots promise high returns and effortless profits, but many (if not all) of the advertised bots are scams designed to steal your funds

1. The Fake “Guaranteed profit” scam

Scammers often promote trading bots with bold claims:

🚨 “Earn 10% daily with zero risk!”
🚨 “Guaranteed profit from front-running strategies!”
🚨 “Passive income on autopilot with our AI bot!”

If a bot promises risk-free returns, it’s a scam. Real DeFi arbitrage and MEV trading involve risk, competition, and slippage. Scammers exploit the lack of knowledge in the space to lure victims.

2. How fraudulent bots steal your funds

Malicious bots can drain your wallet through various methods:

Fake approvals & unlimited token spend
Some bots request unlimited approvals on your wallet tokens, allowing them to scammer-owned contracts to drain your entire balance.
Malicious contracts code
Hidden backdoors allow the creator to withdraw funds from your wallet (hidden transferFrom() calls)
Hidden transaction redirections
A bot might appear to perform trades but redirects output tokens to an attacker-controlled address.
Phishing & private key theft
The bot might ask you to input your private key or seed phrase.

3. How real trading bots work in DeFi

Unlike scam bots real DeFi trading bots rely on three fundamental steps:

Monitoring the market: A legitimate trading bot constantly scans decentralized exchanges (DEXs) and mempools for opportunities. It looks for price differences, arbitrage potential, or liquidation events.
Identifying profitable trades: Once an opportunity is detected, the bot calculates potential profits by analyzing slippage, gas fees, and execution speed.
Executing the trade: The bot submits a transaction to the blockchain, either via direct execution or using private relay. Successful execution results in a profit - if all calculations were correct.

4. How to Avoid Trading Bot Scams

Educate yourself on the technology and deeply understand what the code is doing.
Test smart contract on test-networks before deploying to the mainnet.
Simulate and test every transaction before execute it (using tools like tenderly or similar)
Be wary of bots that ask for unlimited token approvals.
Never trust a bot that claims “risk-free” profits.