How will the price regulation mechanism of Bancor impact and be impacted by the pump & dumps schemes which have always been so frequent in cryptos?
This is actually one pretty cool aspect of Bancor's price discovery algorithm: it makes pump & dump operations a lot less feasible.
See, when you make a trade with a smart token contract, the price is calculated as if you made an infinite amount of very tiny trades. With each tiny trade, the price for the next goes up slightly. So, if you try to pump or dump, the price will rise with the size of your order & you'll wind up paying a price that takes into account the amount you've bought/sold.
Therefore it'll be extremely expensive to attempt to manipulate the price via pump/dump schemes.
I had guessed that, but I'm happy to get this confirmation. One of the major flawns of the whole cryptocoins world has alsways been these Pump and dumps schemes which transform every project into a casino. If Bancor will be able to fix this, mainstream adoption of cryptocoins will become more imminent.
i agree, and it will also shorten the time to market and mass adaptation which i certain will be great for all of us
