Why are market-makers reluctant to make a tighter market?

[tonyk]

In the Nubits thread, member Chronos points out the difference in current buy-side liquidity between Nubits and BitUSD, here:
https://bitsharestalk.org/index.php?topic=9057.285;topicseen

Just as a side note - he is not a member - he is an aggressive NuBits promoter!

As for the main question - with the new market engine/next release, there should be [hopefully] significant improvements on the market depth and spread. The real market depth will come with the actual usefulness and adoption of bitUSD though.

And I know you did not ask but NuBits has artificial peg/liquidity/depth provided by people specifically paid to do just that.

[Riverhead]

So far the only real users are those that are really bullish on BTSX so they are reluctant to go long bitUSD. The speculative appreciation of BTSX is far greater than the expected yield on bitUSD.

When BTSX has its first big spike to $0.10 or $0.50 I think we'll see a lot of people selling some BTSX to take some profits and hedge a bubble.

[starspirit]

I don't think they are reluctant, I think it has to do with the fact that there is low demand for bitUSD right now. It's easy to get in but not so easy to get out. I think the only solution is to create demand for bitUSD through merchant adoption. The best mm bots can do right now is create artificial volume.

Is it a catch-22 though? Low demand because there is low liquidity?

[Mysto]

I don't think they are reluctant, I think it has to do with the fact that there is low demand for bitUSD right now. It's easy to get in but not so easy to get out. I think the only solution is to create demand for bitUSD through merchant adoption. The best mm bots can do right now is create artificial volume.

[starspirit]

In the Nubits thread, member Chronos points out the difference in current buy-side liquidity between Nubits and BitUSD, here:
https://bitsharestalk.org/index.php?topic=9057.285;topicseen

Any discussion on Nubits v BitUSD can stay in that thread - my interest in this post is liquidity in BitUSD. I know there's been talk in other threads about running market-making bots, and I'm thinking about trying it myself at some point, but they do not appear to be very active based on current spreads and liquidity. What are currently the biggest barriers to current and would-be market-makers?