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xiaoipower

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  1. Saw this article which claims that Ripple under-reported the amount of XRP returned to the escrow in the latest 2019 Q1 report - does anyone know how to verify this? https://coinmetrics.io/an-on-chain-analysis-of-ripples-escrow-system/
  2. No - you are confusing capital gains tax with income tax. You would be charged between 0-10-20% CGT (on the marginal amount depending on the total amount of capital gains - as show in your picture) when you cashout your XRP to FIAT. If you planned on living off the interest of your subsequent investments you would be subject to normal income tax 0-20-40-45%
  3. @htrenkle - I agree with many of the points you raise here. It is obvious that for XRP needs much higher liquidity to be able to support larger remittance payments (to overcome slippage). As you describe above - this is a chicken-and-egg dilemma. There is an argument that goes: XRP is currently dictated by what the market speculates it to be worth xRapid only delivers volume for payment values supported by current market valuation xRapid volume itself does not drive up price, there is buy and sell pressure at either end of corridors and any asymmetry is balanced by arbitrage However, increasing volume will likely lead to higher price speculation If XRP price rises, this enables xRapid to now support higher value payments Repeat I would like to hear your thoughts on: Do you agree with the above? Do you see any other effects from higher xRapid volume? i.e. higher volume means it is harder for whales to manipulate prices, it also leads to greater price stickyness for higher speculative prices
  4. btw - do you have a link to statement from Miguel regarding rebate for slippage costs - I have seen this mentioned elsewhere but never seen a source - very interesting if true
  5. You make some very fair points - the analysis has some extreme limitations (in terms of data) and is predicated on a huge assumption (slippage patterns holding). Also - there are a number of hidden factors that you allude to. I hope people don't read misinterpret this to be any sort of accurate price prediction. Instead, it should only be considered an analysis that, at its absolute best, may give accuracy to within an order of magnitude (based on the available data to me) and at worst is meaningless because its underlying assumptions fail to capture enough of the complexity (or are simply too far removed - i.e. slippage patterns). Either way, I thought it was an interesting hypothetical exercise - and some of the posts here are definitely interesting in terms of shedding more light on the hidden factors not accounted for in the OP. EDIT: I like the point you make about the current scenario being akin to stepping into a bath tub, versus maturity where the analogy would shift to an ocean I think the underlying question is - will the slippage patterns we see today bear any resemblance to the ones we see when there is much higher levels of liquidity? I wonder what the situation is like for current fiat exchanges - they represent a market that is already mature with lots of volume and liquidity - what kind of fiat volumes do you need to cause any noticeable slippage? Some people with Forex trading knowledge may be able to give some further insight
  6. That is another very valid criticism of the analysis - I would to have a better understanding of how the order book pressure changes: Does it show significant constant temporal change just as a matter of course? AND / OR does it show significant change when the value changes a lot? Unfortunately - I have never seen any archived order book history (would've loved to get my hands on the order book when XRP was at ATH)
  7. Yes - that is a huge limitation of this analysis - it would be much better to examine multiple exchanges over an extended period of time
  8. Summary In some recent video interviews with Ripple employees it was mentioned that xRapid aims to reduce remittance costs from current average cost of 400 basis points to around 40 basis points (100 basis points = 1 percent) When you try and buy a large amount of XRP, there is price slippage as you eat up the order book This analysis attempts to look at what the price of XRP would need to be, in order to buy a certain EUR value amount of XRP and not have the price slip more than 40 basis points Based on a random snapshot of Bitstamp's order book today, this suggests that XRP price would need to be around EUR 24 for buy-side orders of EUR 1 million, and around EUR 240 for buy-side orders of EUR 10 million Data DISCLAIMER - all the analysis was done with a random snapshot of the asking bids on Bitstamp's orderbook (taken today), which looks as follows: Analysis and results What can be done today? Looking at the price slippage today, we get the following results: What does the table above mean? At the time of the snapshot, the best price you could get for XRP was EUR 0.45470 As you buy more and more XRP - the price will increase We are interested in the maximum EUR value of XRP you can buy for a slippage of between 20-40 basis points (i.e. the 'Desired slippage' is between 0.2% and 0.4%) The analysis above tells us that we are quite limited in the total EUR value we can buy, i.e.: We can only buy EUR 28,000 worth of XRP before our price slippage is above 40 basis points PS the reason I look at a range of between 20-40 basis points is that xRapid is aiming at the total cost of transfer to be around 40 basis points But there is slippage on both buy and sell side Here we are assuming that in a conservative scenario around half the slippage can occur on the buy-side (this leads to an upper estimate for XRP price - as we are essentially constraining ourselves to a smaller amount of slippage) A more realistic scenario (based on general observations) is that more slippage occurs when buying (rather than selling) - so it might be more accurate to assume a leeway of around 30 basis points on the buy-side What would the price need to be to send larger payments? Our what-if analysis poses the question: what would the value of XRP need to be if: We wanted to buy a larger EUR value amount (e.g. for xRapid) AND We wanted to be constrained by the same slippage amounts (i.e. between 20-40 basis points on the buy-side) I make a HUGE assumption here - that the slippage pattern remains constant even when XRP value increases significantly This would result in the following: What does the table above mean? Going left to right - we are looking at what the price of XRP would need to be in order to buy different EUR value amounts (going from EUR 100 k to EUR 10 million), WITH THE CONSTRAINT that the slippage does not go beyond 40 basis points (i.e going from top to bottom we see the value of XRP decreases because we are tolerating a higher slippage) The analysis suggests that: if we want to send EUR 1 million via xRapid, we would need XRP to be valued at around EUR 24 to avoid a slippage of more than 20 basis points OR if we want to send EUR 10 million via xRapid, we would need XRP to be valued at around EUR 240 to avoid a slippage of more than 20 basis points THIS IS ALL PREDICATED ON A SINGLE RANDOM SNAPSHOT OF ORDERBOOK BEHAVIOUR AND ASSUMING THIS BEHAVIOUR HOLDS TRUE FOR HIGHER VALUES OF XRP
  9. I didn't take it as a dig, haha, but I thought it was a very important point that needed further highlighting - so I added a big disclaimer - thanks for reading!
  10. That is a very important point - as I state in my OP: As you point out - the supply and demand profiles will be constantly changing - so this should be by NO MEANS thought of as a general trend - just some observations of ONE snapshot of current market
  11. Let's look at this in terms of an actual cross-border transfer Buy-side pressure Same as in OP, we are buying on Bitstamp but now the table includes the actual amount of XRP bought: Sell-side pressure This time we are sending our XRP to Mexico, I have taken the order book data from Bitso (first Mexican exchange I could find on google) *no further data was available as my order book history did not have enough liquidity data to cover greater sales A few observations: Liquidity on Bitso is just too low (based on the amount of order book data I could actually get) - we are limited to transfers of just EUR100,000 BUT even when we max out the order book (again, I MUST EMPHASISE - this is just based on the data I was able to get from the order book - the actual order book is larger) - we are getting a pretty good exchange rate of 21.41 MXN per EURO This is compared to the current exchange rate (based on google) of 22.14 MXN per EURO At the same time - we haven't even depressed the price by much - only 2.6%
  12. DISCLAIMER - this post is based on a SINGLE RANDOM snapshot of order books - they should NOT be thought of as a general trend - merely an observation This post is to highlight some interesting observations based on a random snapshot of the order book I took from Bitstamp today. The order book data I managed to grab looked as follows: *Please note that this did not represent the entire order book (which had around 13.5 million XRP on the sell-side and around EUR1.88 million on the buy-side), as that data was not available. Buy-side pressure As you know, if you wanted to send a large amount of money using XRP (i.e. xRapid), you quickly begin to consume the order book. In other words, the last XRP you buy will cost more than the first. I was interested to see how much the price would shift if there was an attempt to send a large payment, the results are as follows: *no further data was available as my order book history did not have enough volume data to cover greater purchases This is quite fascinating - we see for a (relatively) small transfer of EUR400,000 - the last batch of XRP we have bought has a 40% premium in price over the first XRP we bought. Put another way, we have now increased the price of XRP on this exchange by 40% (with just an order of EUR400,000). Sell-side pressure What happens if we were on the receiving end of a large payment, how much would that depress prices by: *no further data was available as my order book history did not have enough liquidity data to cover greater sales Interestingly, what we see here is that when selling the same corresponding value of XRP, the drop in XRP price is much lower. For example, this time when we try and sell EUR400,000 worth of XRP the price I get for my last XRP is only 4.9% lower than what I got for my first XRP. Obviously these observations are just for ONE random snapshot on ONE exchange - but it may be interesting for future price effects of xRapid Would love to hear your thoughts!
  13. That's it - you've debunked the entire logic with this. For me at least, this highlights the entire flaw of trying to estimate price based on this method. However, having read through your lengthy repost I am less clear about what the effects of xRapid adoption will be on price - have you written anything on the matter you can link to?
  14. Thank you for your thoughts, I think its wrong to say the maths is horribly wrong - when you are actually tearing down the logic / method - but that's just a minor semantic point. I will try to address your points below. Discovered error in OP - so 2 billion XRP assumption is no longer used I think you are making two points here: Volume is spread across corridors non-uniformly Volume is not uniform across the day The second point is invalid - the original post already clearly makes assumptions about peak to average payments within the 5 second timeframe. Your first point has given me some food for thought, I will address that below as the next excerpt of your response sheds more light on the matter. I think the point you make about non-uniform corridors is very interesting. Let's look at the example you give, Australia: Total remittance volume out of Australia is roughly $16 billion (Value A) Source: http://www.pewglobal.org/interactives/remittance-map/ Again let's assume xRapid captures 20% of volume (Value B ) This time let's change the method of getting to peak 5-second payment to be even peakier than original method Let's assume that the network is largely empty and that in only 10% (Value C) of all 5-second timeframes that occur in one year, we transfer 90% (Value D) of all volume This would mean that in 10% of times the network is really transferring most of the value, the AVERAGE 5-second payment across xRapid is: Total 5 second timeframes in 1 year: 365*24*60*12 = 6,307,200 (Value E) Total number of timeframes that account for 90% of all remittance payments: Value E * Value C = 630,720 (Value F) Average value of remittance payments sent within 10% of all 5-second timeframes across xRapid = Value A * Value B * Value D / Value F = $4566 (Value G) Now let's assume that average 5-second timeframe payments are only 5% (Value H) of PEAK 5-second timeframe payments (remembering we need to dimension on the peak) This would give a peak 5-second payment of: Value G / Value H = $91,324 (Value I) If BTCMarket volume is only 3 million XRP (Value J), I couldn't find a source for this but it seems reasonable Let us assume again that for our peak 5-second payment we only use 5% (Value K) of available XRP, i.e. Value J * Value K = 150,000 XRP (Value L) This would mean that the price for XRP is: Value I / Value L = $0.61 BUT interestingly, if we assume 0.5% for Value H and Value K (as used in the now edited OP) we get $61 This raises a fascinating point regarding whether or not prices will be dictated by the peakiest corridors with low XRP supply! Your arbitrage point is very interesting - I will need to think on it more. But off the top of my head - it sounds more like a second order effect and not a prime driver of value... could you elaborate more? I disagree about doubling the volume - its the same volume of XRP being bought and sold for the cross-border payment.
  15. No problem - thanks for taking the time to read it I am looking for people to tear holes in the method (but I will of course defend anything I think is unreasonable) - so if you do spot anything else please do highlight!
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