Hi, sweet little game you’ve got here. This is a random dump of ideas from game chat, they make sense at the moment but may or may not have other undesirable consequences:
Exchange orders need to have a minimum amount of time they stay open for after having been placed (1 hour?). This is to prevent an annoying behaviour with another exchange player undercutting you by 0.01 ad infinum until one of you has to go offline. The deposit placed on older orders would prevent spamming 0.01 orders.
Placing bids/asks 0.01 less or more than the top bid/ask in illiquid markets where there are few players or it takes a long time for exchange to match buyers/sellers. It makes price movement very slow and the person to break the salami-slicing trend and compromise to make the deal bears the brunt of the value loss on that trade against the gain of the majority who do nothing to make the market (by moving 0.01). Market making should be encouraged imo. The idea is to have a a minimum % increment/decrement on new bid/ask to encourage the price to move and market to be made. What if somebody places 1-unit order? Then, other players always have an option to select the same price and provide more volume at the same price point. Orders would need to be filled in the same quantity for all players sharing a price point.