The accuracy of on-chain data is crucial for estimating real activity and trading volume. Stablecoins serve as a key measure of activity in terms of both trading volumes and transactions.
On-chain interactions with smart contracts, such as decentralized swaps, liquidity mining, and lending, contribute to transaction volume. However, it is important to note that this volume does not necessarily reflect trading settlements. A recent study conducted by Bloomberg and Allium Labs revealed that stablecoin volumes are often inaccurately reported, with approximately 90% of the activity being driven by automated actions or bots.
Accurate reporting becomes challenging when a set of coins is used in multiple transactions, leading to double-counting. The need for further research became evident when stablecoin transactions reached levels comparable to Visa’s. However, it is worth noting that the reported on-chain volumes may not necessarily be tied to real persons or settlements. The most noticeable discrepancy is between unadjusted and adjusted volumes, with the adjusted value representing only about 10% of the unadjusted value due to repeated transfers of the same funds.
Stablecoins exist on various blockchains, with a particular focus on DeFi. TRON-based assets, including TRON-based USDT, play a significant role in the ecosystem alongside Ethereum. The TRON network currently reports the highest transaction count and value. Since the beginning of 2023, TRON-based USDT has carried a value of $5.42 trillion with nearly one billion transactions during the same period.
The Binance version of USDT holds the second spot, with approximately $759.9 million transactions since 2023, although its value is only $671 billion. The high level of activity may indicate that some of the transactions were either micropayments or automated by bots.
While stablecoins have been launched on several blockchains, especially USDT, Ethereum and TRON remain the primary platforms for stablecoin concentration. Solana has also experienced noticeable growth in this regard. The supply growth of stablecoins is primarily driven by the printing of Ethereum or TRON-based USDT. This metric can also be used to gauge market sentiment and readiness to trade. Stablecoins on other blockchains have a relatively small supply and potentially limited impact on activity.
Bot usage in crypto trading is a well-known phenomenon. Some DEX or smart contract interactions occur too quickly for human involvement, and automation is used to avoid unwanted market movements. Bot usage in trades, NFT sniping, or automated collaterals actually enhances the potential of the DeFi space rather than harming it. Even novice traders can engage with automation through Telegram bot tokens.
DeFi activity is measured by both transactions and active wallets. In some cases, transaction and trade volumes increase without a corresponding increase in the number of users. This discrepancy may indicate the presence of bots. Most decentralized protocols do not explicitly prohibit bot usage. The only area where bot-driven activity is discouraged is decentralized gaming, where developers strive to attract real users with verified identities. However, in projects that do not require KYC, multiple wallets and bots remain a viable strategy.
It is important to note that bot-driven volumes are not necessarily fake volumes. In fact, they can be associated with personal wallets and serve as tools for speed-trading. Telegram bots compete to provide seamless services where users can avoid manual transaction ordering. Automated services like BonkBot have facilitated over $5.5 billion in lifetime trades. Bots have also played a role in driving the recent trend of meme tokens by minimizing the time between decision-making and purchase.
Bot trading is prevalent on networks with a robust DeFi sector and low trading fees. MEV and Telegram bots operate on networks such as Solana, Arbitrum, Base, Avalanche, and Binance Smart Chain.
