Comment by cucumber3732842

That's one way to think of it.

The other way to think of it is that these parties are essentially middle men who make a cut of the difference whenever someone buys/sells far from market price.

Basically if you mis price something they screw you rather than the counter party who would be interested in taking the other side at market.

I think this is stupid and does not add value, but I don't think it's harmful. It's like the stocks equivalent of a junk flipper.