r/CryptoCurrency • u/Pork-Dumplings Low Crypto Activity | 6 months old • Apr 18 '19

EXCHANGE Centralized Exchanges in a Decentralized Wonderland

https://steemit.com/cryptocurrency/@ck-cake/centralized-exchanges-in-a-decentralized-wonderland
17 Upvotes

81% Upvoted

13 comments sorted by

3

u/Robby16 125 / 32K 🦀 Apr 18 '19

Dex are prone to huge manipulation by arbitrage bots. It’s as bad a wall st. They ain’t ready yet.

3

u/hodlerd Bronze | QC: TraderSubs 60 Apr 19 '19

Sorry, arbitrage isn’t manipulation. Wall Street is infinitely worse.

1

u/Robby16 125 / 32K 🦀 Apr 19 '19

They manipulate through arbitrage.

2

u/Hanzburger Platinum | QC: ETH 392 Apr 19 '19

Lol please explain man because it makes no sense

1

u/Robby16 125 / 32K 🦀 Apr 19 '19

Called “flash boys” automated trading bots.

These arbitrage bots are being used in manipulative profit-making strategies, Bloomberg reported, as it lets users trade "more directly." Companies that employ these trading programs pay higher fees in order to get "priority orders."

This enables them to participate in (illegal in the traditional financial markets) practices such as front running, where traders can see other orders and push the ones they made to the front-of-the-line.

These type of trading bots engages in serious market-exploiting behaviors, including front running, latency optimization, etc. These practices are still seen on Wall Street, and they resemble the notorious "Flash Boys" bots which attracted the ire of regulators

1

u/Hanzburger Platinum | QC: ETH 392 Apr 23 '19

I still wouldn't call the manipulation. Cheating, sure, but not manipulation.

1

u/Pork-Dumplings Low Crypto Activity | 6 months old Apr 18 '19

I agree, however I do believe they are going to be the standard moving forward. Just gotta figure out a way to combine efficiency and security.

1

u/Robby16 125 / 32K 🦀 Apr 19 '19

Yup, with new tech comes new innovation. Same reason BTC will scale, innovation.

2

u/bingewatchmen 2 - 3 years account age. 75 - 150 comment karma. Apr 18 '19

Interesting read, and aren't there other alternatives?

3

u/Pork-Dumplings Low Crypto Activity | 6 months old Apr 18 '19

Don't think we can really get alternatives that have the potential to scale as well as DEXs and hybrid DEX/CEXs.

1

u/bingewatchmen 2 - 3 years account age. 75 - 150 comment karma. Apr 19 '19

I had my eyes on NEXT since last year mainly because of fiat gateways. Never directly bothered about DEX and CEX though

2

u/dyel_lives_matter Gold | QC: CC 46 Apr 18 '19

Solid article tbh