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It's because it's only 8mm cubic volume.

But you can get etched glass scale encoders that will give you 1um accuracy for basically nothing these days (IE <50 bucks).

You'd still be better off just using cheap linear motors with encoders built into the rail though.

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Encoders are cheap, even interferometric setup is possible to do at perhaps <$300 if you happen to live near the NeHe rust belt. Actuator backlash and stiction will still be a problem. Good actuators are expensive. Solving backlash is what is nice about this setup.
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Sure. For positioning a microscope point to point the backlash wouldn't matter. For an extrusion head it kind of matters. Still not as much as it would with a cutting head, but it is nice to solve it
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