Interest in low-fee and scalable alternatives to Ethereum has surged over the past year as crypto prices have rebounded since late Q3 2024. Blockchains like Solana have gained popularity for their ability to deploy smart contracts inexpensively while maintaining trust and reliability. However, the rise in bot activity on platforms like Solana and Ethereum layer-2 solutions has raised concerns among analysts due to the near-zero fees that attract both useful and malicious bots.
While some view bot activity as detrimental to organic on-chain activity, others argue that bots play a crucial role in the growth of the ecosystem by creating liquidity and ensuring efficient market operations. They believe that bot activity should be considered a feature rather than a nuisance since bots, like organic users, pay fees that contribute to the network’s health. In traditional finance, bots account for a significant portion of trading volume and are considered essential tools for institutional players to trade efficiently.
Despite the positive aspects of bot activity, the emergence of Maximal Extractable Value (MEV) bots poses a threat to platforms like Solana. MEV bots exploit inefficiencies to maximize profits at the expense of trading fairness, raising concerns about the long-term success of the blockchain. Interventions have been made to address the issue, with the Solana Foundation recently banning over 30 validators for allegedly facilitating MEV bots on the platform.
In conclusion, while bot activity on blockchain platforms like Solana can have both positive and negative impacts, it is essential to understand the role bots play in creating liquidity and efficiency in the market. By viewing on-chain bots as similar to “algos” in traditional finance, users can better appreciate their contribution to the ecosystem and work towards mitigating the risks associated with malicious bot activity.
