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Comment by capableweb | Hacker News Reader

I'm generally pro-cryptocurrencies, but Uniswap definitly makes it harder to see wash trading, not easier. One wallet !== one person, while the regulated, centralized exchanges normally require you to answer bunch of questions and prove your identity because of KYC/AML laws, to guarantee that each participant is just that, one participant.

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Actually with gas costs being what they are, wash trading is extremely costly on Ethereum DEXs, which makes their volume much more reliable.

Wash trading relies on low/nonexistent fees to be cost effective as a market signal.

Interesting! That reminds me of the argument that market manipulation makes markets more efficient by increasing the reward available to honest participants. Wash trading being discouraged by high trading fees doesn't have the same incentive structure, but I wonder if you could arrange it the same way?

Yeah, the ability to generate identities on the fly and interact with the financial system immediately is one thing that would give financial regulators a heart attack.

I wonder if it's actually (free identities) XOR (no wash trading), or if the crypto people will come up with some clever way to account for it or disincentivize it.

One thing I've learned is not to count out very resourceful people with skin in the game. Crypto has come up with some really interesting incentive games that I certainly wouldn't have thought of off the top of my head. That being said, this seems like a really hard thing to fix.

Yeah, decentralized exchanges really only protects against one type of wash trading (ie. from the exchange, to make it look more liquid than it really is).

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