RE: Bringing the ultimate Defi to Hive-Engine??? by cryptographic

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defi · @cryptographic · Sep 12 '20

Creating a whole other attack vector. An attacker waits for a huge pool to develop at xyz price and then comes in and buys it all at once, gaining cheap control over that amount and leaving everyone else with their pants down without moving price. In an organic situation, with the liquidity that naturally corresponds to the given case, price would rise in positive correlation, making each new coin bought proportionately more expensive and leaving market participants more fairly compensated on both sides of the trade.

Be careful with this can of worms being opened on HIVE!

👍 russia-btc

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@okean123 · Sep 12 '20 (edited)

The way liquidity pools usually work is that by buying a huge amount of something you would push the price up. The price is not fixed, but varies constantly and according to which side of the market pair gets bought/sold.

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@cryptographic · Sep 12 '20

We'll see how it works out. If it was really feasible, you can bet Wall Street would have discovered it years ago - and it's not like they haven't had hoards of MIT grads working on it either. 

Algos game, and can be gamed.

Trash in, trash out. You know the old saying.

Auction markets continue to be controlled by humans for a very good reason. Nobody in their right mind is running out there creating "liquidity pools" for the pink sheets now, are they?

Lots of people are going to get hurt with this "pie in the sky", and don't say I didn't warn you.

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@okean123 · Sep 12 '20

$0.31

I mean Uniswap was around for two years now and it works without any issues - it has more trading volume than most of the centralized exchanges. 

And I'm sure Wallstreet wouldn't use something like that, but they generally don't like and use decentralized solutions, so that's logical. 

As you said we need to see how it will work out on HE to see if it will be something good.

👍 cryptographic

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@retinox · Sep 12 '20

As far as I have understood how these pools are working is, that before you can buy at the pool's price you have to add your tokens into it (what makes the tokens more expensive). So if the attacker want to buy all tokens against HIVE at once, he must be only one who owns all the HIVE in the pool. If somebody else has HIVE in the pool then the attacker's HIVE are not sufficient to buy all the tokens.
So your concern about 'cheap control' can't work and it should be secure.
Well, but correct me if I'm wrong. Maybe my assumption is wrong.

👍 co2admin

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