I find that for every brilliant insight Dan Larimer has, he balances it off with something awful/too complicated/possibly sleazy.

Like the liquidity algo has been solved for 100 years...
Just (a) pay every liquidity maker and (b) charge every liquidity taker. Or just do (a) on Steemit.

So there is industry standard practice, but Steemit does something extremely unorthodox. Why?

Well, for one thing the price of STEEM on the Steemit-Market is constantly suppressed...
Right now STEEM costs about $4.45 USD on Polo... but only $3.09 USD on Steemit-Market (30% discount).

But when a n00b uses the Deposit Function to "Buy STEEM" with BTC...
Steemit Inc is charging $4.69 right now... then can just buy it back for $3.09.

Steemit Inc could be making $100,000/day or whatever off n00bs because they have a monopoly on BTC for STEEM deposits...
But for this to work they need fake "liquidity provider" whales to keep the Steemit-Market price suppressed.   

Personally, after about 300 trades I've sold STEEM on the Steemit-Market maybe 2-3 times (I'm always buying it there cheaper).

Call it a conspiracy theory, but I can't see any rational basis for the bizarre algos and market inefficiencies.