Robots, terminals, and LLM – The encrypted user experience is gradually becoming inward.

The Rise of Encrypted User Experience Robots, Terminals, and LLM Take Center Stage

Author: Owen Fernau

Translation: LianGuaiBitpushNews Mary Liu

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In 2023, trading bots have gone from being unnoticed to becoming wildly popular crypto applications.

Top-tier trading bots like Maestro, Banana Gun, and Unibot have facilitated over $4 billion in trading volume in the past year and a half. In the past 30 days, Maestro and Banana Gun have consumed more gas than any other project on Ethereum, except for Uniswap and USDT.

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Major gas consumers on Ethereum

Bots offer a key advantage over the available features for crypto traders – they use something called “intent”, which means users indicate what they want and shift the “how” aspect of the problem to the bots.

For example, with a subset of Telegram bots called Snipers, users can paste the address of tokens about to be airdropped and specify parameters like the minimum amount to purchase the asset, slippage amount, and whether only in the first block after launch.

Banana Sniper Interface

It turns out that this level of control is useful, especially when meme coins were in the spotlight earlier this year (buying the right token early could mean millions in profits).

“Burnout” Intensifies

The success of these Telegram bots has spawned countless rivals, but when Stephane Gosselin, co-founder of Flashbots (a leading organization involved in maximum extractable value or MEV), launched a new Telegram bot called Alfred last week, it sent a message: this industry may continue to exist.

At the recent Devconnect event focused on Ethereum last week, Gosselin found that developers were just starting to understand why Telegram bots make sense. He told The Defiant, “Most people think of bots as bear market speculation rather than a better interface for cryptocurrencies and DeFi.”

Gosselin sees a direct connection between his work at Flashbots and Alfred. “I didn’t create Flashbots to solve MEV, I created Flashbots to improve the user experience on Ethereum.”

MEV Operations Chain

Alfred implements MEV protection based on the work of Flashbots. This protects users from sophisticated bots that have built-in code to exploit opportunities from submitted but unprocessed transactions.

The work of Flashbot and mitigating the negative externalities of MEV essentially brings about intent, while the “solver” ecosystem achieves this.

Gosselin believes that the infrastructure and intentions surrounding MEV (which originated from the development of MEV research) have reached a new stage of maturity. He says, “Now is the time to actually demonstrate its benefits to end users on an interactive level.”

Transaction supply network

From robots to terminals

Telegram is not the only hot spot for innovative user experiences in the crypto world. Last week, the third-largest Telegram robot, Unibot, launched a web-based interactive interface.

According to its anonymous founder, Just Another Guy, the second-largest company, BananaGun, is also developing a web-based product. These products, called terminals, are gaining more and more attention as the “interactive layer” in the booming crypto field.

Unibot robot terminals

Thunder’s founder, Jackson, is betting on this area. Thunder is another project incubated through the Alliance accelerator.

Jackson said, “I think eventually every DEX, whether it’s Uniswap, dYdX, Curve, should all become these invisible settlement layers, and the interactive layer needs to be built on top of them.”

Jackson started creating a program that would immediately buy exclusive sneakers online once they are available. The founder added that all engineers at Thunder also have a background in “sneaker bots.”

Advantages of the interactive layer

Jackson believes that interfaces like Thunder have a natural advantage over interfaces like Uniswap Labs, which started charging fees last month. The idea is that an interface that promotes trading through just one protocol, such as Labs, will not be able to offer better prices than interfaces like Thunder, which taps into liquidity from DeFi.

Gosselin believes that protocol-specific interactive interfaces will still retain users, but he believes that terminals and robot models can also find their own position.

Just Another Guy said that the space is not slowing down—BananaGun adds 300 to 600 new users every day.

Competition for interfaces may also come from aggregators, which, like Telegram robots and terminals, can utilize multiple sources of liquidity. However, the difference with aggregators is that users must use traditional crypto wallets to use them. Therefore, aggregators are typically more secure but cannot provide the same level of customization as robots.

Looking ahead, Gosselin points out that large language models (LLMs) have driven ChatGPT to become the fastest-growing consumer software product in history and will support customized interactive interfaces for each user.

Security concerns

It is certain that, like all crypto technologies, the emerging interactive layer comes with risks. In this case, users will be giving up their private keys to use these solutions.

Derivatives platform Synthetix founder Kain Warwick believes that the security guarantees of many Telegram bots are worse than centralized exchanges, and centralized exchanges (as seen with FTX) are not always effective.

On the other hand, Jackson believes that giving up private keys is a design trade-off worth making – Thunder uses a solution called Turnkey, developed by former Coinbase employees, to safeguard user keys.

The founder acknowledges that the idea of controlling user private keys and providing an experience similar to centralized exchanges is “polarizing”.

While Warwick is critical of Telegram bots, he also mentions his attempt to challenge centralized exchanges like Binance and Coinbase through his recently established company, Infinex.

Jackson and Just Another Guy both say they are considering abstraction, a design paradigm that can simplify the user experience while maintaining self-custody of assets.

Concerns about the security of Telegram bots are not unfounded – hackers made $500,000 in profits at the end of October by exploiting Maestro (a popular Telegram bot with a trading volume of over $3 billion). Less than a week later, attackers targeted Unibot.

Monetization

But for now, the interfaces emerging in the cryptocurrency field are changing the dynamics of the entire industry.

Interface monetization goes against the famous argument in the cryptocurrency field called “fat protocol theory” – in 2016, Joel Monegro, then an analyst at Union Square Ventures, speculated that the value in the blockchain space would be created at the protocol layer rather than the interface layer.

Now, thanks to MEV, intent, and many other infrastructures, venture capital firms like Figmant Capital believe that front-end cryptography will gain enormous value.

As entrepreneurs explore different interface models, it is evident that some founders believe there is great potential for value creation at the interaction layer.

With the continuous development of cryptocurrency user experience, Gosselin, Jackson, Just Another Guy, and even Warwick agree that now is the critical moment to improve the cryptocurrency user experience.

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