Wednesday, November 2, 2016

The exchange protocol part two

I had one type of exchange, digits X fulfillment Y. Y never changes, and under fixed price, neither does X.  The trading pit has no information on the collection of Y in the world, except that it is relate to path length on the graph. The pit boss enforces b enforcingsecure digits.

But, any bot can counter offer, and the two can continue to do so, at a cycle and timeout cost.  They can terminate  negotiations at any time and fall through, or for more sophisticated pit bots, go on searching.

Money markets are just that, the price is left to be auctioned, or to auction, it is S&L pit boss, looking at the divergence in rates in and out, will requantized, and your bid either gains or loses bit error.  So we see two types of pricing, and compounds are either delayed pricing at auction,or current pricing with compound recursion up to a bound.  Very simple.  Thr auction is simply an allocation of  graph cycles to he boss, and it organizes yhe tree to a specified precision, and all the quants pay off.  It is much closer to a fixed window Huffman, it collects the set of bid ask, and they make connection in the re-quant process, or fall through.  In other words, a completed Huffman tree is a completed auction, at the finite limit, and should resolve to  a single step simple fixed price.

Pricing is fundamentally simple, it is the basis f the pit. Auction simply means, your bid/ask is not falling through, the tree is resolved either by local negotataon, or waiting until liqidity bounds demand a re-quant, you get round off error,

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