Cornell Tech Study: Crypto Market is Full of Trading Bots

According to Cornell Tech study, trading bots are being widely used on most decentralized exchanges (DExes). The report also states that it is they who help traders implement manipulative profit-making strategies when trading.

The study was conducted on leading decentralized exchanges, among which were: Token Store, EtherDelta, Bankor, and Kyber Network.

Source: tech.cornell.edu

The document notes that for the successful closing of orders, automated bots use human errors and vulnerabilities of cryptocurrency exchanges. This is possible due to the information asymmetry – a situation in which certain individuals have access to the privileged user data and use it for their own benefit.

Although the authors focused on DExes, they also noted that the problem may be more serious on the centralized ones. This is due to the fact that decentralized trading platforms occupy a much smaller segment of the entire crypto market.

It is worth noting that the name of the study “Flash Boys 2.0: Frontrunning, Transaction Reordering, and Consensus Instability in Decentralized Exchanges” was not chosen randomly. The book with the same name tells us that it was technologies that helped adjust the stock market to the rich.

We want to remind you:

Bithumb Is Going to Open Up a Decentralized Cryptocurrency Exchange

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