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as a trader I know defi is not more cost-effective. the fact that most of the alpha in defi is in arbitrage tells the whole story. the range of possible exploi
by MrMan 5y ago
as a trader I know defi is not more cost-effective. the fact that most of the alpha in defi is in arbitrage tells the whole story.
the range of possible exploits on centralized equities and futures exchanges is very limited. HFT works, and works well, to drive down costs for retail and institutional traders.
there is no happy path in defi which results in narrower spreads, and less risk of block re-orgs, or other exploits which either drive up costs or massively undermine the entire ecosystem.
once again, trust is a lower energy state which pays for itself. this trustless, decentralized mania only serves a tiny subset of early entrants, arbitrageurs, and VCs. it does not result in a better market system by any way of measuring that I can see.
- miohtama 5y ago> As a trader I know defi is not more cost-effective. > the fact that most of the alpha in defi is in arbitrage tells the whole story. What measurements do you use to define cost-effective? I am happy to do an apple-to-apples comparison if you tell what would you like to see in comparison. Also if there is a post/study that shows that there is only arbitrate in DeFi I am happy to read it and try to understand if I am wrong. While this might have been a situation in the past, I am seeing it changing over the last year and half. In my post, towards the end, I pointed out some facts that even with HFT and industry consolidation, traditional finance has not always worked in the favour of a consumer.