Our list of caveats with consuming these smart floor prices
Please see our Production Use page before launching this in production while we're in beta.
Robustness Guarantees & Risk Mitigation
We have taken care to ensure our statistics are more robust than most other pricing data offerings available. That being said: there always exists a breakdown point for any meaningful statistic. Concretely, manipulation cannot be completely prevented if there exists a motivated-enough attacker with a large sum of capital to expend.
We plan to provide a measure of capital (coming soon!) required for a manipulator to influence our smart floor price for a given collection that can be an input into your systems for risk mitigation.
We are constantly thinking of ways to reduce this risk, such as detecting wash/false trading and introducing additional uncorrelated data sources. We recommend that consumers implement their own risk measures to ensure risk parameters are sufficient for your specific use case.
Collusion With Marketplaces
The robustness assumption (that a manipulator would need to expend a certain sum of capital) hinges on the fact that market participants pay a certain amount of basis points to transact on these marketplaces and to produce fake sales transactions.
This assumption is invalidated if the marketplaces themselves collude with manipulators to generate wash trades.
Detecting wash trades are on our roadmap: that being said, there will always be some adversarial attack possible to circumvent any detection system.
Bias Towards Lower Prices
Because royalty and marketplace fees are assessed as basis points on the final sales price, a manipulator or wash trading would rather wash trade at lower price points than higher price points.
We do attempt to filter out wash/accidental trades to the best of our abilities, but a manipulator can still manufacture wash trades. It would be less costly for a manipulator to wash trade at lower prices, which will bias our estimate of fair price towards 0.