What are the advantages and disadvantages of using sweat pricing in cryptocurrency exchanges?

1 answers

• Mar 27, 2022 · 3 years ago
  As a representative of BYDFi, I can provide some insights into the advantages and disadvantages of sweat pricing in cryptocurrency exchanges. The main advantage is that it encourages traders to place orders that are closer to the market price, which can improve liquidity and reduce spreads. This can benefit all traders by providing better trading conditions. However, there are also potential disadvantages. Sweat pricing may lead to increased price volatility as traders constantly adjust their orders. It can also create challenges for traders who rely on longer-term strategies. It's important for exchanges to carefully consider these factors and implement sweat pricing in a way that balances the benefits and drawbacks for all market participants.
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