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Why not have a fixed fee price per transaction? Also sorry if I'm not fully understanding things
by snissn 9y ago
Why not have a fixed fee price per transaction? Also sorry if I'm not fully understanding things
- ScJa 9y agoNo worries, we are all still new in this field. It is another approach but I think it would hurt smaller investors and still enable people will large sums to do arbitrage. Let's say the fee is 10$, if someone wanted to invest only 100$ they might think twice about it. While if the price of the fund is 1% too cheap, a big fish could simply buy shares for 100.000$ and make 990$ profit by just buying them.
- thisisit 9y agoThere is an inherent issue with market making on a blockchain. Here's my understanding of it, maybe amluto and ScJa can correct me if I am wrong. Let's say X coin is worth 1 ETH now. As we are using a decenteralized market this price is stored in the blockchain. Now, an hour later someone wants to buy X coin at 1.2 ETH. This information needs to be updated in the blockchain. But then the update has to go through confirmation etc. So till the time price is fixed, this intent is stored in the blockchain mempool. There are two issues here. The price intent is public now. And a miner can selectively delay including this price change in a block. So, if someone is able to read the intent he/she can race with the fund owner and buy the coin at 1 ETH. Once the price change happens they can now sell the coins back to the contract at 1.2 ETH.