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Crypto’s October 10 flash crash saw an estimated $19 billion in liquidations and wiped out $450 billion in market capitalization. Much has been written about the chaos and what worsened the cascade—high leverage, thin liquidity and stablecoin depegging—so I am not going to rehash it all for you here. What’s clear is that the market’s infrastructure did not pass this stress test.
The problem, however, starts with how crypto markets operate in general. Most retail and institutional traders use the same exchanges that not only match buy and sell orders but also act as liquidity providers and…
