Imagine a world with one Rock LP and a couple of static 0.25 % fee exchanges.
We then run to Hive Engine ourselves to burn the excess SWAP.HIVE at better price and return the resulting HIVE in our pool (pocketing a profit for the shareholders).
You can do this whenever you get a request that pushes you outside 0.9975-1.0025 (just run to the competitor's bridge instead of HE) until everyone else is one-sided. If the pressure continues, your price inevitably moves out of the inner window. Now you are the only shop in town and you start cashing in nice fees (while offering sweet rates to anyone who wants to refill you).
Everyone is going to hate you for being the evil speculator but in reality, you are the only shop in town because you can bring a service that keeps the town running instead of waiting for the point where crashing into the 1.01 wall is the lesser evil.
Now, who is going to launch this first?
Obviously I don't think it may happen but when people are trying to get HIVE out to take profits, things like this can happen. I don't think I will launch anything but it's a self-regulating market.
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I was saying if the peg on your supposed pool was implemented then people could use arbitrage on even on HE with the 1% fee. After all if it was skewed so far to one side, you could earn off the 1% deposit and there is no actual limit for that type of trade.
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