> You can win instantly by offering to trade with a transaction fee so high it almost wipes out all but a cent or two of the entire arbitrage profits, because nobody else will pay a higher fee
This is like 1980s sawtooth algos in real finance.
A lot of crypto is former HF folks taking old strategies to a dumber field.
I have really enjoyed watching crypto act like they are white knights against the evil traditional financial system and then go on to reinvent it piece by piece.
You're assuming that the contention was with the functionality and not with who controlled it.
The current players in crypto are the same people. And there’s noting systematic about crypto that changes this — people with money can afford to buy more mining capacity or stake more coins.
There’s nothing evil about aiming to earn a penny or a fraction of a penny on a transaction.
Who pays that penny?
Whoever wants to pay an extra penny. Like any other transaction.