This scenartio, some fool downloads tradingpit and sets it to default S&L, and connects to the bitcoin exchange. What happens? Hissmart card will flash redand redder until the lending ratrs are skyhigh and deposit rates at zero. This smart card has already picked up the typical bitcoin sequence,and it is imprecise.n So, set the lending ratrs sky high, shut deposit rate and the channel shuts, the site owner is losing $5/month, plus enormous labor and humor.
One day, on a lark, someone borrows abitcoin for the fdsyat 20%, and pays back principal and interest. Who gets the interest? In the default case the excess flow in, gains, stay with the S&L bot until it takes losses. There is no seigniorage unless clearly speicifoed in the contract.
The bot knows the behavior of those digits, and the behavior of the bitcoin, it will raise deposit rates, according the the published liquidity bounds, the queue size difference between rate in and rates out.
Ther information revealed about bitcoin goes from zilch to a couple of bits, and bitcoin suddenly stabilized, your S&L site is stable, it self measures
It is the 'Who is going to stop me?'
Hey, I have a spare hundred, I down load tradingpit, and limit my loses to a hundred a month, and let the bicoin S&L set rates. Transactions costs, remember, measurably at zero.
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