Zhao Believes the Best Way To Protect Consumers Is With Large Liquidity - Aliens: AI Crypto News & Markets Updates
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Zhao Believes the Best Way To Protect Consumers Is With Large Liquidity

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Aliens

Sun, Jul 31, 2022

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Big liquidity is one of the best consumer protection mechanisms, as it prevents market manipulation and volatility and reduces liquidations, according to the Binance CEO. Imagine if we divided our liquidity into 180 countries, making it 180x less difficult for large traders to swing the market and significantly increase volatility. At this point, arbitrage traders will try to balance prices, but they are not as efficient as an order book, and arbitrage traders will make money (paid by consumers) between buyers and sellers. Another misconception people sometimes have: On exchanges, users don’t choose counterparties, they trade with an order book, but in fact, the order plays the role of a broker. Greater liquidity also provides users with better prices, a tighter spread, and reduced slippage, a very important consumer protection form.

Source: Twitter

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