Hummingbot Review: Is It a Legit Crypto Bot?

Hummingbot was mainly designed to automate trading for users in the crypto space. It also executes customizable market making, a function at the center of the liquid mining concept. Since its introduction to the market, the software has enabled more than 3200 individual market makers to fill 2.4 billion dollars in trading volume for over 72+ token issuers and exchanges.

What is Hummingbot?

Hummingbot is said to be an open-source toolbox for professional liquidity providers. It helps traders to build and customize market making and arbitrage bots that run on both centralized and decentralized exchanges. It essentially offers a base layer infrastructure for traders to modify and create their own strategies and add new exchange connectors. 

Quick summary

Here is a summary of the bot’s features:

• Liquidity mining

You can develop and run a market making bot on the platform and earn rewards. 

• Support for both centralized and decentralized exchanges

Hummingbot has partnered with exchanges like UniSwap, Binance, Huobi, Terra, etc., ensuring you have a variety of trading coins and tokens to choose from. 

• Works with many languages

The bot supports several coding languages, with most users preferring to work with Python. It is also possible to code the product using Cython, Shell, C++, Dockerfile, and Makefile. 

Hummingbot: background

Hummingbot was developed in 2017 and 2018, but it was a proprietary quant trading bot called Falcon then. It was initially developed with off-the-shelf open source elements, but the surfacing of a few problems made the development team decide to make it open source. For now, the core team has 76 members, but their real identities are not disclosed. In any case, the team works with several advisors, including John Wu (President, Ava Labs), Taiyang Zhang (Venture Partner, Aladema Research), Rajiv Bhat (CEO, martini.ai), and Reuben Yap (Project Steward, Firo). 

How does it work?

In addition to providing a platform where users can create their own trading systems, Hummingbot also allows people running it to collectively offer market making services. As a result, you can earn token rewards. The market making bots maintain buy/sell orders on the order book. 

How to sign up with Hummingbot

Follow these steps to sign up with the bot:

1. Create an account on Github
2. Download the software and install it
3. Create a password
4. Link your exchange

Does Hummingbot offer a demo account?

A demo account is not available. Rather, the platform offers a simulation feature for you to test out your strategies before using them in the live market. 

Profitability of Hummingbot

The devs say that users can attain profits by providing liquidity mining programs that token projects can utilize to source liquidity from a decentralized network. In fact, simulations indicate that traders can earn 10-50% yearly while offering the same liquidity level as a hedge fund. 

Payments, deposits, and withdrawal 

Trading deals conducted on the platform are similar to ones done on exchanges. Therefore, when you operate the bot, you will be required to pay fees you would be asked to pay on the exchanges (for example, maker, taker, and withdrawal fees). There’s no minimum amount of deposit you need to have to use Hummingbot, though. However, you should pay attention to exchange-specific minimum order sizes. 

Developers normally caution against letting a bot initiate withdrawals. The APIs of exchanges don’t automatically permit withdrawals. In this regard, you should not activate the feature that would allow Hummingbot to make withdrawals. This is dangerous as you may lose your funds. 

Exchanges supported

Humming bot supports several 30+ crypto exchanges, and some include:

• Dydix
• Binance
• Huobi
• Coinbase
• Terra
• UniSwap

What about customer support?

The vendor recommends you do the following if you are facing issues with the bot:

• Check the Glossary to learn what the trading jargons mean
• Post a new issue on GitHub to report a bug or ask for a new feature
• Join the platform’s official Discord and post your question and get the support you need

A Help Center is featured, and it comprises a collection of articles (including FAQs), which might contain the answers you are looking for. It is also possible to get live support by initiating a chat on the Help Center or the Hummingbot Miner app.   

Benefits of using Hummingbot

• It’s free
• The bot supports popular exchanges
• The system earns rewards through liquid mining

Drawbacks of using Hummingbot

• It’s not beginner-friendly

Pricing review

Hummingbot is free. Therefore, you can download, set up, and run it without being asked to pay a dime. 

What are security measures?

The bot is relatively safe as long as the device you are using has tight security controls and the code has not been interfered with. The devs have also pledged not to utilize the personal info you provide for their trading or share them with unwanted parties. 

Is Hummingbot legit?

Hummingbot seems legit. As we speak, the platform has a large community in Discord that consists of 17.9 members and another 115 code contributors on GitHub. What’s more, the bot is backed by reputable companies like BainCapital Ventures, Slow Ventures, Start, Initialized, DeFiance Capital, and Arrington XRP Capital. 

Ease of use

Traders with no experience in coding or utilizing commands may find Hummingbot complex. At the moment, the platform uses a command line interface, which can be very confusing and difficult to navigate due to the high degree of memorization and familiarity required. 

Is Hummingbot a good choice for automated trades?

Hummingbot may be a good choice for automated trades. Not only does it offer a chance for traders to make profits from crypto effortlessly but also enables them to earn rewards through liquidity mining. 

What are the risks of using Hummingbot?

This robot always carries the risk of API error. This could cause the system to crash or continue to trade wrongly. In this case, the trader could lose lots of money if they are not monitoring the bot continuously.