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Who is Sonny's counterparty on Bitso?


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I've listed as many of the participants I believe are part of an xRapid transaction, but maybe not all are involved in the transaction I'm using as an example. But certainly only one of them is Sonny's counterparty on Bitso. 

Here are the participants and their role in or relationship to the transaction, as I currently understand how xRapid works. But my understanding may be incorrect which is why I am asking the question. 

The Participants :

1. Bob is a customer of SuperFI and BankUS in the USA.
2. BankUS is Bob's bank where USD will be withdrawn. 
3. SuperFI is a company that uses xRapid. 
4. xRapid is an API created by Ripple. 
5. Ripple is a payments software company. 
6. BankMX is Mary's bank where the MXN will be deposited. 
7. Mary is Bob's supplier in Mexico. 
8. BitStamp is an exchange that offers XRP/USD. 
9. Steve is a user on BitStamp with bid and ask offers. 
10. Bitso is an exchange that offers XRP/MXN. 
11. Sonny is a user on Bitso with bid and ask offers. 

The Payment :

Bob must pay Mary for some products he received. Mary will only accept MXN as payment.

A Note :

I do not require anyone to explain the process of who sends or receives, buys or sells, etc. I just want to know one name or entity. 

The Question :

Who is Sonny's counterparty on Bitso? 

Edited by Guest
Added a bit to try to clarify.
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Thank you @LordVetinari You have been my most important XRP friend in trying to find the answer. All the way since we started beta-testing XRP UNITED... when was that..? Seems like a year has pas

IMO yes. Bitso does have bots making markets in their exchange. So does Bitstamp, Bittrex, Coinsph and other future xRapid exchanges. However, I would not be surprised if Ripple is helping them to kic

My reasoning of the functionality of xRapid in above was inspired by the research conducted by @BehindtheLedger in below tweet.  

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5 minutes ago, Raz said:

@LordVetinari So as I understand this question Sonny’s counter party is Mary who buys XRP from Sonny with MXN.

The way I understand the question, the order flow is to MXN not from, (as the payment is by Bob to Mary from USA). This means that SuperFI sells XRP to Sonny on the behalf of Mary. This would make SuperFI the counterparty making the transaction on the behalf of Mary. I would say Mary becomes the counterparty with SuperFI when they deposit the money in her bank account.

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I may have been too vague in my OP. I'll try to give a little more background to my understanding of the process and exactly the name and stage of the xRapid transaction I'm asking about. 

I know that an exchange's trade logs are capable of generating a column that displays the "counterparty" for every trade. For example, if you look at your trade logs from an exchange, it will list, Here is the info from Bitso:

image.png.34dae276dbf6c47052b5b1d9eb4058c5.png

  Bitso does not show the counterparty, but that does not mean there isn't a record of the counterparty. 

The counterparty, to my understanding, is another account holder on the exchange. So I believe I can rule out Bob, because Bob to my knowledge, would not have an account on Bitso. 

So to clarify, I believe the counterparty would be required to be a registered user of Bitso. I'm just not certain who. 

So, who is Sonny's counterparty on Bitso? Whose account would appear in the trade logs? 

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Here's my reason for asking. First, I believe it would be either an account registered by SuperFI or Ripple.

I'm asking for help because when people talk about "network effects", depending on who has access to and control of the actions of that account would be two different "networks". 

For example, if it's SuperFI's account, the network effect would only be as far reaching as SuperFI's customer base. 

However, if the account was controlled by Ripple, I think that's a whole different network. 

What kind of requirements a new xRapid client is expected to be meet?

For example, if it's SuperFI's account, what "Verification Level" would SuperFI be required to reach to satisfy xRapid? Some countries require bank accounts, and "real name" verification. 

However, if the account was controlled by Ripple, Ripple would likely have all the requirements met and new clients seamlessly plug in. 

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Thank you @LordVetinari

You have been my most important XRP friend in trying to find the answer. All the way since we started beta-testing XRP UNITED... when was that..? Seems like a year has passed 🤗

I think I got it now, I wait until our guys get it online and then hopefully we can start talking about real xRapid.

I must also say @LilBender has been huge help in directing me to right directions on few cross roads. Especially hidden JPY talks.. hahhah... I got it much, much later, but I think I get it right 🎯

I will never forget how much you helped, you have no idea 🙌🏼

Without you two, I might as well had missed it.

Let’s keep it like that, let’s think outside the box and next time we meet, the beers are on me! All of them!

 

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5 hours ago, LordVetinari said:

I've listed as many of the participants I believe are part of an xRapid transaction, but maybe not all are involved in the transaction I'm using as an example. But certainly only one of them is Sonny's counterparty on Bitso. 

Here are the participants and their role in or relationship to the transaction, as I currently understand how xRapid works. But my understanding may be incorrect which is why I am asking the question. 

The Participants :

1. Bob is a customer of SuperFI and BankUS in the USA.
2. BankUS is Bob's bank where USD will be withdrawn. 
3. SuperFI is a company that uses xRapid. 
4. xRapid is an API created by Ripple. 
5. Ripple is a payments software company. 
6. BankMX is Mary's bank where the MXN will be deposited. 
7. Mary is Bob's supplier in Mexico. 
8. BitStamp is an exchange that offers XRP/USD. 
9. Steve is a user on BitStamp with bid and ask offers. 
10. Bitso is an exchange that offers XRP/MXN. 
11. Sonny is a user on Bitso with bid and ask offers. 

The Payment :

Bob must pay Mary for some products he received. Mary will only accept MXN as payment.

A Note :

I do not require anyone to explain the process of who sends or receives, buys or sells, etc. I just want to know one name or entity. 

The Question :

Who is Sonny's counterparty on Bitso? 

 

IMO the answer to the question is that Sonny's counterparty is mostly Bitso itself. However, it is possible that very small xRapid transactions does still have normal traders as a counterparty.

My reasoning is that Bitso's XRP/MXN volume is (and has been) too low to facilitate any decent sized xRapid transactions. A known xRapid customer Mercury FX tweeted in below that they had made a xRapid transaction where they moved 4550 USD worth of value. We don't know for sure when and how exactly the aforementioned transaction happened (?) However, we know that Bitso's XRP/MXN volume (24h) has been hovering around 100,000 USD recently. At the moment it is 107,000 USD in below link. If we assume that the xRapid transaction happened recently then we can estimate how large chunk the transaction took from the 24h period. Thus, we would get 4,55 % ((4550 USD / 100,000 USD)*100) of the XRP/MXN volume (24h) was made by one single xRapid payment. Is it realistic that Sonny is just a trader (or several of traders) who saw the xRapid's Sell XRP / Buy MXN order(s) in the order books of Bitso and then they pick up the trades in about 60 seconds and with a fair market price? It is not realistic IMO simply because there are not enough traders organically in Bitso that would Buy XRP / Sell MXN and hence make the decent sized xRapid transaction possible.

Bitso's job is to make the market for XRP/MXN meaning that they will provide enough open buy/sell orders of XRP/MXN in their order books 24/7. Hence we can call Bitso as Market Maker (MM). On contrary, xRapid transactions are closing buy/sell orders of XRP/MXN and hence we can call xRapid transactions Market Takers (MT). Currently there are not enough organic XRP/MXN liquidity in Bitso as I explained already. Thus, the only way Bitso can make market for those decent sized xRapid transactions is to ramp up the XRP/MXN volume in their order books by themselves. They are financially incentivized that every xRapid transaction succeeds because they earn commission for the trades like usual.

https://coinmarketcap.com/currencies/ripple/#markets

 

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If you still happen to think that 4550 USD is still doable for xRapid without any extra trading efforts from Bitso itself then how about million USDs. At least according to the old announcement of Mercury FX they seemed to believe that they will make payments worth million dollars or more with their xRapid. 

"As with all things, we will start with modest sums and add 0s as we progress. Come the end of the pilot there is no reason we shouldn't be making payments of a million dollars or more."

https://www.mercury-fx.com/market-news/announcements

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1 hour ago, hallwaymonitor said:

IMO the answer to the question is that Sonny's counterparty is mostly Bitso itself.

Thank you. So just to be clear.

A Bitso bot, not a Ripple bot, bought Sonny's XRP?

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@LordVetinari

When you do trading at Bitso, it’s Bitso who is the counterparty. Whenever you want to withdraw your funds, they are responsible to pay you your money or crypto that you have in your trading account.

If your bank or payment service provider in Mexico uses xRapid and your payment is routed using xRapid, then there is no counterparty at all. 

To enter xRapid you have to have a KYC/AML verified account in that bank or PSP that is connected to xRapid through Bitso. Payment must leave from your account there, but bank can make bulk xRapid requests for dozens of customers in one request.

Hopefully this clears it. 👍🏼

Trading you can do in Bitso as you wish.

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4 hours ago, LordVetinari said:

A Bitso bot, not a Ripple bot, bought Sonny's XRP?

IMO yes. Bitso does have bots making markets in their exchange. So does Bitstamp, Bittrex, Coinsph and other future xRapid exchanges. However, I would not be surprised if Ripple is helping them to kickstart their xRapid one way or another. However, I don't believe that Ripple have installed their own bot in Bitso's exchange. In below is an old insight about Ripple's accelerator program.

https://ripple.com/insights/ripple-rolls-300m-ripplenet-accelerator-program-grow-volume-xrp-utility/

We don't know for sure how xRapid works in detail level but my guesstimate is that when the end user (Bob) executes the xRapid transaction the info will go to Bitso's bot that will automatically open new matching order Sell XRP / Buy MXN. I mean even before the Bob's XRPs arrive in Bitso's public XRP address the matching order Sell XRP / Buy MXN is already there waiting for to be closed by Bob's XRPs. IF this is true then the poor organic XRP/MXN liquidity in Bitso will no longer be an issue.

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17 minutes ago, hallwaymonitor said:

However, I don't believe that Ripple have installed their own bot in Bitso's exchange.

Thanks. I was doing a slow crawl through an xRapid transaction. That was one part of what I was trying to figure out, exactly who was on the other side.

Much appreciated. 

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