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This is great knowledge. People should not be investing based on what's popular or what is being traded. Better hold than gamble. Monetary speculation should be dumb in a sound money system
Can somebody explain to a crypto-naif what "wash trading" means here?
A "wash trade" is a trade which generates no value because it represents a swap in kind. For example, if I sell a broad market ETF like VTI and buy a nearly identical asset at the same price from a different firm, that could be a "wash trade" for tax purposes (simplifying this, but this is basically the gist). In the context of crypto transactions, it's typically referring to trades which are just shifting the same a…
It's a DAO that enables you to mint infinite DAI (some crappy "stablecoin") for a transaction as long as you pay it back in the same transaction.
One of the stated goals of this "feature" is
> Exploits requiring a large amount of capital will be found quicker which makes the DeFi space safer overall.
Ah yes, intentionally making your own product less secure and more open to abuse, so you can make it more secure. Good work. This is taking testing in production to a whole new level.
So this implies that the crypto markets are actually far less liquid than the trade volume implies. Suddenly those massive 10% +/- fluctuations in a day make a lot more sense.
This is why Uniswap's data is much more valuable than centralized exchanges. On-chain trading permits a degree of transparency and trustworthiness not readily feasible with centralized exchanges. Centralized exchanges are incentivized to doctor their data and lie about their volumes. The larger the volumes an exchange publishes, even if fake or gamed, the more relevant an exchange appears. Users must blindly trust wh…
Earlier quoted context omitted.
When you trade a any security to yourself (or someone closely related to you) to give the illusion of the price going up. (EDIT: Well... it could be for any reason. But illusion of price going up is one such application of the strategy). Lets say you invent a new NFT. You sell the NFT to __yourself__ for $100. Then, you sell the NFT to yourself (again) for $200. Finally, you sell the NFT to yourself for $1000. Then y…
Yes this works with NFTs but does not work with fungible money because there are typically thousands of people willing to sell once the price goes from 100 to 200.
I recently had to go through extensive KYC/AML email conversations and phone calls with bunch of exchanges like Coinbase and others. Got me interested how wash trading could happen, when they were so strict with me, and which exchanges were investigated. These seems to be the exchanges they investigated. Would be interesting to see a breakdown of percentage per exchange, as I still don't understand how wash trading c…
Coinbase isn’t one of the unregulated exchanges.
Title should be "70% of unregulated crypto exchanges..."
No, regulated at as well it seems, see https://news.ycombinator.com/item?id=29279380 Edit: sorry, misunderstood parent comment.
> We quantify the wash trading on each unregulated exchange, which averaged over 70% of the reported volume.
Many actors (including core devs) in the Ethereum (and other crypto) ecosphere see front running (known as MEV) and the payment for protection thereof (known as flashbots) as a "feature" so it's no wonder that other "creative trading techniques" run rampant.
It seems like the reason for every financial regulation in traditional banking is rediscovered in the crypto space just much faster.