kaal:claim:4067783-037

Centralization and monopolies are a threat to market liquidity because they can carry too much mass or too much velocity, and an imbalance in either direction, too much mass and too little velocity or too little mass, damages the market.

Source quote, verbatim
When there is too much mass and not enough velocity, it can gunk up the engine - when there is too little mass in the market, it can be cleared too quickly. Centralization and monopolies are a threat to market liquidity as they can have too much mass or too much velocity.
From

Wulf A. Kaal, DAO Fallacies (2022), III.4 Use #4: Efficiency, p. 16
https://ssrn.com/abstract=4067783 · source PDF

Cite as

Wulf A. Kaal, DAO Fallacies (2022). SSRN: https://ssrn.com/abstract=4067783

Classification

mechanismsupport: arguedfailure: Centralized power accumulation degrading liquidityfamily: liquidity-and-market-structure-failureeconomicsdefidecentralization

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