Continuous Blockchain Monitoring: Sniper bots constantly scan blockchain networks (like Ethereum, Solana) for new token listings on Decentralized Exchanges (DEXs) or changes in liquidity pools. This involves monitoring smart contract events and network transactions.
Smart Contract Analysis: When a potential opportunity is detected, the bot analyzes the associated smart contract. This ensures the contract is legitimate and identifies key details like the token address, initial price, and liquidity.
Optimal Gas Fee Calculation: Crucially, the bot calculates the optimal gas fee. In blockchain networks, “gas” is the fee required to execute a transaction. A higher fee means faster execution. The bot aims to set the lowest possible fee that still ensures the transaction is processed before others.
Millisecond-Level Buy Order Execution: Speed is paramount. The bot executes a buy order within milliseconds of identifying a profitable opportunity. This often involves directly interacting with the DEX’s smart contract.
Targeting Lowest Possible Price: The bot’s primary goal is to buy the token at the lowest possible price. This usually means getting in very early in the token’s trading lifecycle, often right after listing.
Real-time Price and Volume Tracking: After the purchase, the bot continues to track the token’s price and trading volume in real-time. This data is used to determine the optimal exit point.