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The thing is right now people are actually having difficulty trading (at least manually).

Back when Ethereum was making waves before the DOA fiasco, the network conveniently experienced DDoS attacks each time Ethereum experienced a significant decline. I and many other short sellers got smoked a couple of times.

Once the DAO shit-show was in full swing, the same thing started happening all over again. At one point, one of the Poloniex users posted a link to internal IMs between Vitalik and the Poloniex team (along with some of the other crypto exchanges at the time) talking about how preserving the value of Ethereum was absolutely necessary to preserve the altcoin market (and Poloniex specifically). If I remember correctly, it was someone from the Ethereum development team who leaked that around the time of the DAO exploit and the hardfork discussions were in full swing. I walked away from Poloniex for a good while after that.

In recent history, I have come back for the one and only reason which made sense - it is the deepest pool of liquidity in the altcoin marketplace. I have altered my trading to deal with the constant lag and timeouts. So far, I am doing great on Poloniex.

One thing I will say I have noticed is when attacks happen and the lag and timeouts happen, the trade engine continues to execute orders on the order book. While I'm not cool wit that, I make sure to account for that with each trade I execute. Until another exchange attracts deep pools of liquidity, Poloniex will continue to rule the roost.

I just wonder how much of their volume is real though.

That depends on what defines "real". For instance, bots can be defined as not real, but you could have legit traders using bots to trade for profit might be the exception.

Either way with the lawsuit which as recently filed, all that will come to light in the discovery process of the litigation.

I think the thing one has to remember is you are trading a minimally regulated token in an unregulated marketplace. As such, don't be astonished with tape painting and manipulation. Either find a trading strategy that works or vote with your feet and your coin. I'm not condoning the manipulation. Rather, I am suggesting one should move to a marketplace which provides satisfactory solutions to the individual trading in an unregulated environment and works best for you. The only way a business learns is from pain to the pocketbook.

I mean people make trades against themselves using bots and creating false volume. It is known to happen a lot on exchanges with 0% transaction fees.

Poloniex does not have 0% transaction fees. Each buy and sell does cost between 0.15% to 0.25%, so I'm not sure how much is bogus volume.

Now painting the tape with bogus buy and sell walls would be another conversation. Unless the order executes, no fee is paid. That is common practice on every crypto exchange I've been on and I doubt you'd find one without it.

I know they don't. It doesn't mean that the same sort of thing doesn't happen. If you can make up the losses on fees by manipulating the price then it might be worth it.