‘Flash Boys’ Trading Bots Are Running Wild on Crypto Exchanges

in cryptocurrency •  6 years ago 

Many see decentralized exchanges as the future of cryptocurrency trading. This is in line with the idea of decentralization that is favored by the crypto community.

One problem is that cryptocurrency exchanges are seeing bots front running. FIrms that employ these techniques pay higher fees which give them direct access. This creates an arbitrage situation which they exploit.

Bloomberg broke news of this which sent crypto prices downward.

As more activity is moved to decentralized exchanges (DEX), this practice could become even more pronounced. Since these exchanges are outside the reach of any regulatory body, it is akin to the Wild West. There is little that can be done from a regulatory standpoint to stop these practices.

What makes this entire situation even more problematic is that nobody is even sure how much of this takes place on centralized exchanges. With outfits like Binance building out their own DEX, the practice is only expected to grow.

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  ·  6 years ago Reveal Comment

I do not like bots in cryptocurrancy trading either. I use binance and there are lots of bots moving nearly all coins. Thank you for this valuable post.

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Chainlink could and probably will be the answer.

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