Author: Jorge Timón 2014-12-21 19:39:46
Published on: 2014-12-21T19:39:46+00:00
In this email exchange, various perspectives on the advantages and disadvantages of proof-of-publication markets are discussed. The initial example given involves Alice wanting to sell a unit of A for 100 units of B, with Bob willing to pay up to 200 Bs for 1 A. In a proof of publication system, execution price is the mean between bid and ask, so Alice publishes her order and Bob could publish his order at price 200 Bs, which would execute at 150 Bs. However, after seeing Alice's order, he knows he doesn't need to pay that much and publishes an order buying for 100 Bs. This results in Alice getting 100 Bs and Bob paying less than he was willing to pay, everyone being happy. However, it is noted that in the real world, sellers and buyers want to know they're connected to actual sellers and buyers - not sybil attackers trying to shave off a margin for themselves - and are willing to pay a premium for that. The concept of proof-of-publication makes the tradeoffs and options available and lets end-users pick the right one for their needs. It is suggested that accurate unbiased price information is worth money, but "fair" implies morality and therefore it's a very subjective term, making it difficult to define precisely. Some argue that there are other models for p2p markets beyond those that require proof of publication for their orders, and that only those using proof of publication are secure is incorrect. It is pointed out that traders want to trade and the primary function of markets is exchange, not price discovery. It is suggested that in systems that allow third-parties to republish asset bids and offers, we will even see third-parties republishing bids and offers from less secure systems to more secure systems to get better price discovery.
Updated on: 2023-06-09T15:00:55.524856+00:00