Why You Shouldn't Criticize Liquidity Monopolists: Liquidity Is More Important Than Spread - It Gives Steem Value!

I have seen a wave of posts criticizing certain whale liquidity providers for hoarding all the points and offering wide spreads.

However, I feel as though those raising these concerns are in general not so much interested in the development of the ecosystem rather than trying to get a taste of the 1200 Steem pie.

The criticism often appeals to notions such as "greed", and more credibly the fact that a handful of whale liquidity providers have demonstrably little incentive to tighten spreads.

I feel as though appealing to greed is just a way to frame the argument in a negative light. Because what is really happening is a handful of people acting on incentives that are present.

Why would they provide liquidity in a new, highly volatile and virtually untested crypto without some substantial reward?

Would a rational market maker not try to maximise rewards?

Secondly, liquidity is what will attract newcomers to Steem, it matters much more in this growth stage that Steem is in, than tight spreads do.

Newcomers will probably be fairly agnostic about Steem (coin), in the sense that they will want to convert Steem into fiat, which is far more valuable at present.

And the faster they can convert Steem into fiat, the more they will be incentivised to engage with Steemit.

And so, a newcomer or a Steem agnostic user will not care that his Steem value is being essentially debased by 10% due to wide spreads, since writing a blog post costs near $0, and the value the user extracts from Steem is being able to convert it into fiat.

I hope liquidity whales are incentivised to continue providing liquidity to Steem and let's not allow envy to dictate policy!

Flag Bounties: https://steemit.com/steemit/@positive/i-m-offering-flag-bounties-flag-rubbish-to-death-and-reward-value-also-bounties-to-promote-hidden-gems

Check out my other posts:

Don't panic sell you'll regret it

https://steemit.com/money/@positive/don-t-panic-sell-you-ll-regret-it-short-message-regarding-steem-price-5-min-read

Beware of the Catfish scammers

https://steemit.com/introduceyourself/@positive/beware-of-the-catfish-scammers-or-don-t-trust-photo-verification-with-solutions-introduceyourself

The reflections of a professional Steemer in 2031

https://steemit.com/steemtales/@positive/part-1-4-the-reflections-of-a-professional-steemer-in-2031-steemtales-everything-written-so-far-in-one-post

Steem needs to invest in a better sub-reddit

https://steemit.com/steemit/@positive/steemit-needs-to-invest-in-a-better-sub-reddit

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