Hummingbot supposedly provides endless opportunities for traders who want to get the most out of the crypto market. The vendor says the bot has evolved into the globe’s most popular open source code, with 30+ exchange connectors and 115 code contributors.
About Hummingbot
Hummingbot gives you a platform for creating automated strategies that can study the market and consequently place buy/sell orders for you to earn profits from the crypto market.
Hummingbot crypto trading bot: how does it work?
Hummingbot is an open-source project that incorporates crypto trading on both centralized and decentralized protocols. It enables users to run a bot that implements customized, automated strategies for cryptos. The creators reveal that they also developed the code to enhance decentralized market-making, allowing community members to contribute to the liquidity and trading efficiency in the crypto markets.
How to set up Hummingbot
Setting up Hummingbot is not complicated. You can easily download the app on Github and install it on your device. Create your password and then choose the exchanges you want to work with and connect them to the software. You are now ready to use the code to create any type of crypto bot you want.
Key takeaways
The bot has the following features:
- It is publicly available, auditable, and free.
- It is designed to be used by individuals and professionals.
- The system allows you to develop any automated trading strategy on each exchange and blockchain.
- Token holders can govern numerous aspects of the app.
User interface
Hummingbot may be easy to use for developers familiar with the command-line interface that enables them to set up, customize, and run automated bots and strategies. In a sense, the bot is restrictive to beginner traders who have zero coding knowledge. If you have never utilized a CLI, you may be confused with the commands and any spelling errors will cause the commands to fail. Also, mistyping an instruction will normally require you to start from scratch.
Trading strategy behind Hummingbot
Hummingbot allows you to work with different strategies, but market-making and arbitrage bots are the most common ones. The market making approach entails offering liquidity to a trading pair on an exchange. Arbitrage bots enable users to take advantage of price differences between trading pairs on various exchanges.
How profitable is Hummingbot?
The real profitability rate of this bot is unknown. While the platform may help one user earn substantial income, the case may be totally different for another user. Your trading and coding skills will play a huge part in influencing the kind of outcomes you receive. When it comes to liquid mining, simulations supposedly show that traders can generate 10-50% in profits yearly when they offer a similar liquidity level as a hedge fund.
Safety and security of Hummingbot
Hummingbot is fairly safe. Like other online wallets, the platform stores your API keys and private keys in encrypted form, utilizing the password you enter when you begin using them. Your keys are as safe as the device you are running them on, being that Hummingbot is a local client. Principally, the bot uses the keys to develop authorized instructions locally on the local machine. So, only the orders that have been signed or authorized by the client are sent out.
Customer support
You can get customer support through various channels. One is by chatting with the support team or other traders on Discord to get the help you need. Another option is to email the team directly with your queries or concerns. There’s also a detailed documentation that can assist you in learning how to use Hummingbot not to mention the FAQs page that tries to cover basic info regarding the platform.
Reputation
This bot has been around since 2018, and has really grown since then. The team recently integrated a decentralized market-making feature that gives individual market makers a chance to earn rewards by offering liquidity to token issuers on various exchanges. To date, this feature has supposedly enabled over 3200 individual market makers to fill $2.4 billion in trading volume for 72+ token issuers and exchanges.
Team members
Hummingbot was developed by CoinAlpha, Inc. The company consists of a global team of engineers and traders who reflect the globally distributed, culturally diverse Hummingbot user base. As of now, the core team has 76 members, but their identities are kept secret.
Exchange compatibility
Hummingbot works with the following exchanges:
- Altmarkets
- Binance
- BinanceUS
- Crypto.com
- FTX
- HitBTC
- Huobi
- Kraken
- UniSwap
- Terra
- Balancer
- Celo
- Perpetual Finance
- Dydx
- Coinbase Pro
- Huobi Global
- Okex
- and so much more
Hummingbot pricing: is it worth your money?
Yes, it might be. The project offers to help you create trading bots that run on any blockchain or exchange. But there’s a catch. You need to have programming skills of some sort. Otherwise, you will have a difficult time understanding how the platform operates and configuring the bots. Furthermore, if you are unfamiliar with trading practices and concepts, then the learning process will become harder.
Hummingbot review: upsides and downsides
| Upsides | Downsides |
| The system is free to use | The bot is not user-friendly |
| It’s compatible with both centralized and decentralized exchanges | |
| It provides rewards through market-making services |
Hummingbot: final remarks
You can invest in Hummingbot at zero cost and increase your chances of earning profits from the crypto market through automated trading. The unique liquidity mining algorithm integrated also serves to increase your income potential as you use the platform. The main setback, though, is that you won’t get anywhere with the product if you lack programming skills.
