I was just watching a video today that talked about arbitrage. If people actively start utilizing this using the diesel pool, wouldn't that skew the liquidity?
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Actually the basic idea of these diesel pools would be to deliver liquidity even for illiquid markets. Because there is basically a possibility to exchange your tokens in any type of situations if you don't worry too much about the price. Combined with normal markets as you justly suggested, this offers the opportunity for arbitrage. Arbitrage has a big added value for a market because it generates movements. People would trade on a continous level to make a little profit from arbitrage. So the added liquidity from Diesel pools would generate added liquidity on the traditional market because of arbitrage seekers.
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