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People implemented automated trading strategies decades before Blockchain or "smart contracts" existed.

seibelj 5y ago
Key word is “permissionless” - anyone on earth can create more projects and anyone on earth can invest. No license, government, or agreement needed.
- DebtDeflation 5y ago
  What does permissionless even mean in the context of an automated trading strategy? Ultimately, someone needs to put up the initial capital, meet marginal calls when required, and cover losses when they happen. What happens when your smart contract goes to initiate a sell and there are no buyers (a real possibility in any market but especially illiquid crypto markets)? Exchanges exist for a reason.
  - seibelj 5y ago
    Everything is building blocks. For the project I linked it’s fully collateralized - you can’t withdraw money that would make the system unstable. Other projects build on other pieces of infrastructure to do all of that automatically. Again it seems like the person I’m talking to understands very little about this space because your questions are rudimentary to anyone who understands crypto, but you comment as if you are an authority. This is the central problem with HN and crypto conversations.
    - DebtDeflation 5y ago
      Actually, the central problem with crypto advocates is that they start from the position of assuming everyone around them is an idiot and then set about building replacements for all sorts of things (banks, currencies, exchanges, legal dispute resolution mechanisms, supply chain management, databases, etc.) that they themselves do not understand and end up with fragile, inferior substitutes that never get any traction for good reason.
      - seibelj 5y ago
        Clearly I am indeed speaking with someone who has no idea what they are talking about, which as I previously stated is the default HN crypto commenter.
      - aaaaaaaaata 5y ago
        > assuming everyone around them is an idiot Or just subservient to a corrupted system.
  - KomradeKeeks 5y ago
    In this context it means: -system is built with bearer-style assets in mind to handle liquidations without having a 'negative' balance (so instead of a margin call, onus is on the user to track prices and refill liquidity, otherwise the system liquidates the position to pay back the other market participants involved) - Anyone can put money in this - the smart contracts use other automated markets like AMMs (think of it like a two-way vending machine between Twix and M&M's, where one can set the price between two assets based on how many units of Twix and M&M's they put in initially, and people can trade into and out of them by putting one in, and getting the other. The people who put in both provide liquidity, and they get a portion of the trading fees. These two-way vending machines are set up so that if someone puts a ratio of Twix/M&M's in their vending machine that doesn't match the market price, someone can just arbitrage that out so that the price matches the market. It's like finding the cheapest place to get food

Key word is “permissionless” - anyone on earth can create more projects and anyone on earth can invest. No license, government, or agreement needed.

DebtDeflation 5y ago
What does permissionless even mean in the context of an automated trading strategy? Ultimately, someone needs to put up the initial capital, meet marginal calls when required, and cover losses when they happen. What happens when your smart contract goes to initiate a sell and there are no buyers (a real possibility in any market but especially illiquid crypto markets)? Exchanges exist for a reason.
- seibelj 5y ago
  Everything is building blocks. For the project I linked it’s fully collateralized - you can’t withdraw money that would make the system unstable. Other projects build on other pieces of infrastructure to do all of that automatically. Again it seems like the person I’m talking to understands very little about this space because your questions are rudimentary to anyone who understands crypto, but you comment as if you are an authority. This is the central problem with HN and crypto conversations.
  - DebtDeflation 5y ago
    Actually, the central problem with crypto advocates is that they start from the position of assuming everyone around them is an idiot and then set about building replacements for all sorts of things (banks, currencies, exchanges, legal dispute resolution mechanisms, supply chain management, databases, etc.) that they themselves do not understand and end up with fragile, inferior substitutes that never get any traction for good reason.
    - seibelj 5y ago
      Clearly I am indeed speaking with someone who has no idea what they are talking about, which as I previously stated is the default HN crypto commenter.
    - aaaaaaaaata 5y ago
      > assuming everyone around them is an idiot Or just subservient to a corrupted system.
- KomradeKeeks 5y ago
  In this context it means: -system is built with bearer-style assets in mind to handle liquidations without having a 'negative' balance (so instead of a margin call, onus is on the user to track prices and refill liquidity, otherwise the system liquidates the position to pay back the other market participants involved) - Anyone can put money in this - the smart contracts use other automated markets like AMMs (think of it like a two-way vending machine between Twix and M&M's, where one can set the price between two assets based on how many units of Twix and M&M's they put in initially, and people can trade into and out of them by putting one in, and getting the other. The people who put in both provide liquidity, and they get a portion of the trading fees. These two-way vending machines are set up so that if someone puts a ratio of Twix/M&M's in their vending machine that doesn't match the market price, someone can just arbitrage that out so that the price matches the market. It's like finding the cheapest place to get food