Thanks Tim.
My eyes and head did start to hurt a little prior to their mention the last time I took a look at the white paper, I have given this section another go today.
My understanding is basic, and far from any algebra calculations, but could you give an example of why an SMT wouldn't opt to go with the (optional) AMM approach?
My first thoughts are, would it be a hindrance not to adopt AMM?
Is this similar to what SBD is to STEEM?
And, is the option there to stop STEEM whales becoming SMT whales elsewhere?
Thanks!
A market maker is basically someone who provides liquidity on both sides of a price point, so users who want to buy/sell tokens will have someone to sell/buy to/from.
An automated market maker basically provides a way for the SMT creator to pre-load liquidity in the market, so there are tokens available to buy/sell around a price point.
It is different enough from STEEM/SBD that I wouldn't recommend comparing them.
Technically a STEEM whale could become a whale in any SMT by buying up a lot of the SMT, but that would give the SMT a lot of value (because of high demand) so in most cases that would probably be a good thing. I think SMT communities will be hoping that whales take an interest in buying their tokens, to make the value of their SMT go up.