Quote from: speedy on January 16, 2015, 05:53:56 PM
Are you saying the blockchain protocol itself would be doing arbitrage?

No - just having those markets available (or permutations thereof) makes arbitrage possible, which means all participants get an opportunity to participate. No need to have an official blockchain bot.

bitasset pairs are already fixed in the hard fork coming with 0.5.0

I don't like the idea of market-making by the blockchain. If you're so sure you could design a good MM algorithm for the blockchain, why don't you do it yourself and make some money?

I believe this will be re-enabled in the same update as we will get relative orders, 0.7, hopefully coming within a few weeks.

Are you saying the blockchain protocol itself would be doing arbitrage?

I like it - sounds like the arbitrage profits could be a nice extra source of yield for BitAsset holders.

Of course there is no liquidity for bitbtc/bitusd yet so that would need to improve before this made any difference.

If there were markets in the DEX which enabled internal arbitrage, it could help with providing liquidity and narrowing spreads.

For example, if we had the pairs:

btc/usd
btc/eur
eur/usd

You would be able to do triangular arbitrage between them which would narrow the spreads and be less risky than running a market maker.

Cheers, Paul.