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RE: pHBD-USDC is Now Live! | HBD is About to Get a $5,000,000 Liquidity Pool

in LeoFinance • 2 years ago

The advantage of the LP is that arbitrage can occur. Hence if things start to move to the high side, there is an opportunity to arbitrage the other way and make some money.

I believe there is even going to be a trading bot running in the LP that will trade back and forth. That will help things.

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2 years ago in LeoFinance by
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     2 years ago  

    ok now I understand that we will need a bot to always keep the price in the right place.

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       2 years ago  

      That is what automatic market makers tend to be. They are computerized buying and selling. They make money on the spread. One of their primary use cases is to bring the bid/ask prices closer together.

      But in a situation like this, it can serve as a way to keep things pegged.

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