Bots, snipers and who actually wins

Wonder

1. How does a trading bot execute a buy in the same block that a token is created?
2. What specific mechanism allows a single creator to hold supply across multiple wallets before public launch?
3. Why do platform fees remain constant regardless of which traders win or lose?

Explore

1. Speed determines access. On high-throughput chains like Solana, new tokens trade on bonding curves where the first buyers face minimal competition. Automated snipers watch for token-creation transactions and send buys with high priority fees or Jito tips to land in the same or the next block. This secures entry at the lowest possible price, before retail users can react. The advantage is not information but latency; the bot acts before the human sees the token on a dashboard.
2. Creators exploit this speed asymmetry through bundles. A bundle groups multiple transactions into a single atomic unit executed by validators in one block. By bundling their own buy orders across numerous wallets with the initial liquidity provision, creators secure a significant portion of the supply at launch. These holdings remain hidden or distributed among addresses that appear independent to casual observers, masking true concentration until later analysis reveals the links.
3. Market makers and searchers employ sandwich attacks on decentralized exchanges. They watch for pending swaps, through the public mempool on Ethereum or through private order flow on Solana. The searcher buys just before the victim’s swap, the victim’s swap then fills at the worse price that buy created, and the searcher sells immediately after. This extraction occurs within a single block, leaving the retail user with a worse execution price and the searcher with an arbitrage profit.
4. Retail traders access similar tools through trading terminals offering one-click buttons for sniping or copying wallets. While these interfaces reduce technical barriers, they do not eliminate latency disadvantages against professional infrastructure. Retail users often pay higher priority fees to compete for block space, increasing transaction costs without guaranteeing inclusion. The interface provides speed relative to manual interaction but remains slower than dedicated bot operators with direct validator connections.
5. In tokens lacking cash flow or utility, trading is zero-sum: gains for early entrants equal losses for later buyers minus fees. Bots and insiders capture the majority of appreciation during initial volatility. As supply unlocks from insider wallets, sustained selling pressure offsets retail demand. The platform collects transaction fees on every trade, earning revenue regardless of holder outcomes. Validators earn block rewards and priority fees independently of token price direction.
6. Analyzing a specific launch reveals this dynamic. Open a Solana explorer and identify the first block containing a new token’s swap transaction. Inspect all transactions in that block to count distinct wallet addresses buying simultaneously. Cross-reference these addresses with subsequent blocks to track immediate selling patterns. This manual inspection demonstrates how concentrated initial buys correlate with rapid price appreciation followed by distribution, confirming the mechanical advantage of automation over individual reaction time.

Key facts

Exercise nine, six, three, one

Fact check

Dates, figures and claims checked against the published sources listed below.

• Jito, Bundle Documentation (2024)
• Solidus Labs, '2025 Rug Pull Report' (May 7, 2025)
• Dune Analytics, pump.fun graduation analysis (2024)