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JoelKatz’s Response about xRapid Liquidity

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If there were so many, and large number of transactions happening at the same time that it ate up all of the XRP a single MM had access to, I'd be very impressed.  My suspicion is that it would force some kind of queing of transactions, slowing the speed, until more liquidity was added via price movements, more MMs, or that one MM getting more XRP.  #2 definitely sounds like a short term problem unless I'm missing something.

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Sounds like he's saying that the MMs in that corridor can't provide sufficient liquidity for XRP to sustain cross-border payments if us normal crypto users, etc. use up that liquidy for our greedy selves or there aren't enough MMs there to provide sufficient liquidity, which means that that corridor can stall or stop working altogether for its intended use, just like your home internet connection occasionally stalls and sometimes stops working entirely because your kids are using it for video games when you need to use it to do serious work.

He's saying that 2. is a possible outcome, but might not happen,  but the chances are there because of us cyrpto investors and or not enough MMs there to provide sufficient "bandwidth", IMO.

That's why I've said since the beginning, it would have been better just to have XRP be a bank-only solution with no non-FI users involved...it allows for so many potential issues otherwise...yeah, regular users provide liquidity, but they can also use it up too.

Anyway, there is talk about the Mexican-US corridor,  but what about the South Korean-Japan corridor?

Edited by enrique11

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It sounds more like a possible outcome/issue with MMs not able to prime the corridor for sufficient liquidity than to do with regular users. They might wind up having to pay MMs  "bonuses" to attract more MMs and keep the existing ones in place just to keep this corridor primed until it's self-sustaining.

Couldn't they just do that to avoid number 2.?

If it's an issue with the MM's not able to provide sufficient liquidity because of FI demand rather than because of cyrpto users, than this is a good sign that FIs are using it.(Dad wants to use internet connection for a large amount of serious work, but internet connection sux  and can't handle the demand).

But if it's an issue with regular users interfering with MMs limited ability to provide liquidity to FIs, then this is not good. (Kids using limited bandwidth connection for video games when Dad needs to use it for serious work).

The analogies are not super strong, but sort of get the idea across.

Edited by enrique11

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10 minutes ago, XRPHornets said:

Back to the discussion about XPool. Is that a product for people to make money off their dormant XRP by providing it as short term liquidity to assist MMs ?

That's an interesting idea.

Edited by enrique11

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Yeah, so it seems like the demand is not there yet, but if it were, he has given two possible outcomes, with the best outcome (1.)  being more likely, and Ripple will study things to deal with possibility of 2. and likely improve conditions for future corridors and mechanisms (for cross-border payment channels and liquidity).

 

Edited by enrique11
correction

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I don’t understand no.2

no.2 is like warp factor 10 you can’t get there because your then at infinite velocity (non-trekkies this means nothing to you)

price exponentially increases and balances out the liquidity equation 

only thing that would stop it is volume of such magnitude that it doesn’t have a chance to catch itself

if that’s what he is worried about, then holy **** I need to buy more, lots more

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I don't really understand how this stuff works...been too distracted by SEC and XRP.

Does Xrapid source some, all or none of it's liquidity from regular crypto exchanges where regular investors trade in XRP or will Xrapid go a special route with traditional exchanges to source institutional liqudity from professional, established MMs?

Does Xpool allow sourcing of XRP holders directly to act as makeshift MM for Xrapid product?

Can regular investors add to the liquidity source, and if so will they contribute more than interfere with liquidity that's sourced for institutional use, or will it balance out on average to where it doesn't really make a difference?

Lots of question, but I haven't bothered to look into the details of these banking/FI  products...I have some catching up to do *sighs*.

 

Edited by enrique11
additional comment

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1 hour ago, AlbertStroller said:

I'd imagine David has set up a test instance, simulating expected and non expected market behaviour. I would be shocked I this wasn't the case. Ripple Labs have this covered, imo.

Yeah I've asked Ripple guys a couple of times but no one has ever replied.  I assume because it's a loose loose for them.  If they reply that they have done some then there is clamour for results...   Good ones or bad.  If they haven't done some then they risk abuse from knuckleheads for not doing enough to make everyone here rich.    :) 

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2 hours ago, enrique11 said:

Does Xrapid source some, all or none of it's liquidity from regular crypto exchanges

All of it....   Xrpaid is at core equivelant to a scripted series of calls to exchange APIs.

 

2 hours ago, enrique11 said:

Does Xpool allow 

No one knows anything about XPool yet.

Edited by Tinyaccount
Added 'equivelant' since I don't know its innards

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5 minutes ago, Tinyaccount said:

Yeah I've asked Ripple guys a couple of times but no one has ever replied.  I assume because it's a loose loose for them.  If they reply that they have done some then there is clamour for results...   Good ones or bad.  If they haven't done some then they risk abuse from knuckleheads for not doing enough to make everyone here rich.    :) 

Ah OK thanks for that info :) I wonder if there are any clever coders that could do it? FYI you can do it in your head and it beats counting sheep. I never stay awake for long enough to reach a conclusion though..

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