A defense against this would be to mark the multisigs that are being used as anchors. Rather than 2 of 2, you could use 2 of 3 with the 3rd key being a standard value.
You can then set k based on how many trades are happening on the altcoin chain.
Attacker can make anchors for nearly free (large transaction values relative to transaction fees):
...but then an attacker can DE trade to himself to fool your algorithm into an unbounded value of k (as high as the attacker wants to make it).
What is the method of attack if peers limit the amount of trades to the total fees paid by an address? other than some small amount for newbie accounts.
Wouldnt that require the attacker to conduct all attacks simultaneously using properly aged UTXO? Or are we assuming arbitrary depth of reorging the altcoin is available to attacker to deploy at anytime? Since the attacker wouldnt get the BTC until the trades complete, it seems he would have to borrow the BTC to buy the hashrate. And if an altcoin can be rewritten at will with the attacker's existing resources, what secures that chain without atomic swaps?
I guess the probability of successful attack creates some expected value, but I am having a hard time correlating the hashcosts for coins with decent trading volumes and the likely number of open trades at any given time. If the success of attack is not 100%, then that raises the risk of lost capital. I think realistic cost estimates are needed to attack the various chains and compare it to trading volume and amount of time that would be at risk
James