Hi guys, Julia Dev here. I have decided to test the potential of chatGPT by seeing if it can generate anything interesting or useful in decentralized finance. Specifically, I asked it to generate a trading bot that utilizes DeFi liquidity pools to take advantage of certain arbitrage opportunities for earning passive income. The result was incredible. The bot allows you to automatically trade given tokens from the Ethereum blockchain without the need for manual transactions through traditional methods. It leverages decentralized finance platforms such as Uniswap to execute transactions for arbitrage. Essentially, it identifies pending transactions within a block and injects our transaction with a higher gas fee to ensure it is processed first, allowing us to execute a sell order right after in the same block. This strategy allows us to profit from the slippage difference in the transaction.
If this sounds complicated, don’t worry. You don’t need any coding experience. The script was generated entirely by chatGPT. Let’s get started.
First, make sure you have the MetaMask browser extension installed and connected to the Ethereum mainnet. Next, head over to Remix, a web3 application that allows us to develop, compile, deploy, and launch smart contracts coded in the Solidity language. I will provide a link to Remix in the description below.
Once you’re on Remix, create a new contract under the contracts folder and name it ‘bot.sol’. In the description, I have included a link to the bot’s source code. Copy this code and paste it into the ‘bot.sol’ file you just created.
After pasting the code, take a look at lines 55 and 56. These should be the addresses for the wrapped Ether token. Feel free to verify them on Etherscan to ensure accuracy.
Now, let’s compile the bot. Select the 0.6.6 version of Solidity under the compiler. Make sure the language is set to Solidity and the EVM version is set to default. Click on the ‘Compile bot.sol’ button and wait for the bot to compile.
Once the bot is compiled, we can deploy it from our wallet. Head over to the ‘Deploy and Run Transactions’ section in Remix. Select ‘Injected Provider’ as the environment, and MetaMask will pop up. Connect MetaMask to deploy the contract on the blockchain. Keep in mind that you will need to pay gas fees for smart contract deployment on the Ethereum network.
After the contract is deployed, we need to fund it with Ethereum to snipe liquidity pools. Copy the smart contract address and paste it into MetaMask. Deposit exactly 0.2 Ethereum or more for the bot to function properly. The more Ethereum you deposit, the larger transactions you’ll be able to sandwich and the more profit you’ll be able to accumulate over time.
Once the contract is funded, click on the ‘Start’ button to enable the bot to start sniffing mempools for liquidity pairs. This will allow you to sandwich transactions.
After running the bot for a desired period, you can check the profits. The bot has been proven to generate significant profits, with some users making eight to ten Ethereum or more in a week. The profits may fluctuate week to week.
To withdraw the profits, simply click on the ‘Withdraw’ button. The bot will exit the liquidity pool and return the total amount of Ethereum, including the profit, back to your wallet.
I hope this guide has been helpful in understanding how to generate passive income using a decentralized trading bot. If you have any questions, feel free to reach out to me on Telegram. Don’t forget to share your profits in the comments below and subscribe for more profitable ways to make passive income using AI and web3 tools.
