Defeating the Botnet Armies: New Regulations, Engineering, and Architecture to Turn Bots for Bad into Bots for Good, and the First Cåin (Å) Denominated Features Go on Sale
Åzone Futures Market is at once an exhibition and an educational apparatus. Certain behaviors were built in from the beginning to allow it to function like contemporary financial markets, and as such, to be exploited like them as well. This was by design to demonstrate the activities in the markets that shape our world and their consequences. A major part of the exhibition is how the market will evolve over time to account for these exploits.
In the first few days of operations, a number of bots have flooded the market. This has destroyed the ability to create meaningful prices that reflect the aggregate worldviews of human investors and undermined the value of hot tips. This mirrors the activity of high-frequency trading (HFT), the superfast computer-driven trading that has come to dominate current financial markets. HFT makes it increasingly difficult for regular investors to achieve profits in the market, in part by abstracting the value of the underlying asset. When you invest in a publicly listed company today on an exchange that allows HFT, part of the price is created by software run by advanced traders like banks and hedge funds that responds to more activity in the market than to the health of the company. The result is a market that is a playground for those with capital and technical means to get rich off of everyone else’s money rather than a reflection of the value of the companies that are being invested in.
Today, our market engineer, Charles Broskoski, and market architect, Hugo Liu, have rolled out new measures to help stem the adverse effects the bot activity in the Åzone market. All trades must now be confirmed with an “I am not a robot” captcha, a box that is simple for humans to check but difficult or impossible for bots, stopping their trades. Also, we have now limited account sign up to one per person, making it difficult to launch an army of investors, and the market-making algorithm that determines prices has been tuned to favor the investments of earnest investors over speculating bots. To support these technical fixes we have also launched the first iteration of the Åzone Regulations, available here on Github, which spell out acceptable investment behavior and penalties for breaching the rules. These will be updated over time.
While the bot behavior has destroyed pricing in some futures, it has also provided a valuable lesson and was not against the original terms and conditions. As such, we are rolling out our first cåin (Å) denominated features which can be purchased by those who have accrued large amounts of cåin. This rewards ingenuity while requiring those who have amassed great wealth to enter into a contract to behave according to the new regulations that ensure market health, stability, and fairness.
For 250,000Å, any investor will soon be able to purchase the right to operate sanctioned bots with direct access to the Åzone market engine in the form of an API key—the secret codes that unlock the feeds to market data and trade functions. To keep this privilege, they must help bolster the market stability rather than take it away. Any malicious activity will result in penalty fees and the termination of their API key.
We are in talks with the original owners of the botnets to determine other creative uses of the cåin they have amassed. Updates will be issued on the Åzone Review.
Image: View of the Great Chartist Meeting on Kennington Common (1848) by William Edward Kilburn via Google Art Project