The market price keeps fluctuating. We need to keep re-creating the order book to match this change.
The MM bot we operated is a one-way system that buys SBD from the STEEM internal exchange, transfers it to Upbit, and resells it.
And we need to develop it again to match HTX.
Also, the MM we created is a system developed for our own profit, and it is different from the nature of the proposed proposal.
If the above proposal is approved, everyone needs to check how the MM bot works, so additional development is absolutely necessary.
If there is no MM bot, there will be an order book gap in the STEEM internal market, and there will be a lot of losses when buying or selling SBD.
I thought your premise was that there was a systematic distortion where the markets were always out of sync. If there are constant fluctuations that cross whether there's an arbitrage opportunity isn't that an indication that the markets are already naturally close? Right now it looks like the orders on the internal market put the price at between 0.19 and 0.20 SBD/Steem. Coingecko says that on HTX SBD is trading at $1.34 and Steem is trading at $0.2581, so 0.2581 / 1.34 = 0.193 SBD/Steem. Those seem pretty close to me. What transactions would your bot be issuing in an environment like that?
The automated posts kept saying that your Upbit bot was preliminary. Why did it never get to full release? How effective was your bot at closing the price differentials between the internal market and Upbit?
If there are profits to be made by arbitraging between HTX and the internal market, wouldn't it be better and more decentralized to just let the profit motive incentivize whoever wants to take the risk to do buys and sells, and natural economic equilibrium keeps the markets in sync? What is the benefit of a bot that does this and burns the profits?
Why? Historically there has been a gap but that seems likely related to distortions of the highly restricted Upbit market. Isn't HTX much more open?
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I think you have only observed the market for a short time. Your opinion is that if you leave it to the market freely, everything will be resolved.
MM bots are working on all exchanges, but they are working very limitedly on the STEEM internal market. There are several reasons for this, such as development limitations and insufficient trading volume.
We processed more than 250K SBD transactions through Upbit MM bots, and users traded SBD with a difference of 0.x%.
And MM bots are not officially released. (This is not a service that is open to everyone.)
Simply put, if there is no MM bot, there will be a gap in the order book as shown in the picture below.
Users who trade during this gap will suffer losses.
Currently, there is a gap of more than 3% in the order book.
And the reason for making this is to look at it from a long-term perspective.
The current volume of the internal market is very low, so it may not seem like a problem, but what if the volume increases?
This gap increases even more, and more trading losses occur.
This in turn reduces the frequency of using the STEEM internal market.
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My opinion is that if things don't seem to be resolving to what a standard economic analysis would tell us then there must be some other factor in play. It seems like there was something weird going on with the Upbit exchange. I am skeptical that "not enough trading bots" on the internal market was, is, or will be a problem. How far out of sync have SBD prices historically been with non-Upbit exchanges?
You seem very focused on things like quantity of transactions. How much profit did you make off of your transactions?
Wait. Who are you saying is suffering losses in this situation... Buyers? Sellers? Both? People with access to exchange markets? People without access to exchange markets? Both?
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It's too hard for me to tell you all the cases.
Most of the trading volume of SBD so far has been on Upbit. And Upbit was only available to Koreans. The problem here is that users who can trade on Upbit traded at 1SBD=$5, but users who can't use Upbit traded at 1SBD=$4.5.
I provided liquidity to the STEEM internal market at around 1SBD=$4.9x$ through MM, so that users who don't use Upbit can trade at close to 1SBD=$5.
Then, users who can't trade at 1SBD=$5 have to sell at about $0.5 cheaper than the market price, which means that they incur relative losses.
If there's a lack of liquidity, it's difficult for many users to trade. This is the key point.
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I want to make sure we are on the same page about how your previous system has been working: you were buying SBDs on the internal market, depositing them to Upbit, selling the SBDs on Upbit, buying Steem on Upbit with the proceeds of your sales, withdrawing the Steem from Upbit back to your account here, and then using that Steem to buy SBDs on the internal market (repeat from beginning). Correct?
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