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Improving Escrow control and XRP price stability.

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1 hour ago, Julian_Williams said:

I have heard that OTC prices are usually above market prices.  Big institutions make OTC buys because their big orders would push up the price more than the premium they pay OTC.  The opposite is true for OTC sellers.

I'm no expert but I would expect OTC price to be below market price. Why would an institution buy OTC when they can get a lower price on an exchange? Or am I missing something here?

Another thing I was thinking is, a low XRP price would in absolute numbers put more XRP into circulation than a higher price. Could that be of any benefit to Ripple in the future? 

I also believe Ripple is working to avoid a sinking price. I don't know to what extent it's allowed to interfere in the market. I do agree with @cryptoxrp that XRP is theirs to sell at whatever price they think is just. 

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Posted (edited)
9 minutes ago, Danny said:

I'm no expert but I would expect OTC price to be below market price. Why would an institution buy OTC when they can get a lower price on an exchange? Or am I missing something here?

If you do it in the open market in one go you create a buy wall, which can pressure the price to move above it depending on sentiment. Depth graphs give you an idea of what would happen. You could stagger it, but that still somewhat pressures the price up (clear steps in a depth graph). There's also exchange fees to take into account.

With OTC you guarantee a price for the whole purchase volume and could even save when you take into account the exchange fees.

Edited by Socrates
spelling

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Posted (edited)
8 minutes ago, Danny said:

I'm no expert but I would expect OTC price to be below market price. Why would an institution buy OTC when they can get a lower price on an exchange? Or am I missing something here?

Another thing I was thinking is, a low XRP price would in absolute numbers put more XRP into circulation than a higher price. Could that be of any benefit to Ripple in the future? 

I also believe Ripple is working to avoid a sinking price. I don't know to what extent it's allowed to interfere in the market. I do agree with @cryptoxrp that XRP is theirs to sell at whatever price they think is just. 

This is what I read:  OTC are usually large orders that push up the price.  OTC sales push down the price, so there are big OTC markets on stock exchanges to sell at premium prices.

Edited by Julian_Williams

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Posted (edited)
1 hour ago, cryptoxrp said:

I hear USDT should be investigated for foul play. 'Printing USDT where there is no real backing of the coin'. Something for the financial authorities and exchanges to look into. Best thing for all exchanges to do is unlist USDT asap.

Assume the worst with respect to USDT. I followed Tether with a lazy eye ever since late 2017, and at this point I have little doubt they are printing USDT out of thin air. Making Tether crypto's unofficial central bank. Ironic, isn't it?

All the red flags are there: seizure of accounts (850 million that is), being looked into by the authorities, difficulty getting banking support (Tether changed banks a lot), the links with a shady exchange which are very strong (BitFinex), throwing up lots of smoke and mirrors, etc.  The amount of USDT has also ballooned enormously the past few months. 

Yes, I do hope that when the entire thing implodes that the damage will be limited. But BTC better be north of 20k when that happens, as a lot of fresh money will be needed to keep up the value of it. Mind you: BTC's value could have been totally artificially inflated for over 2 years already.

Edited by Parabellum

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Posted (edited)
1 hour ago, Parabellum said:

Assume the worst with respect to USDT. I followed Tether with a lazy eye ever since late 2017, and at this point I have little doubt they are printing USDT out of thin air. Making Tether crypto's unofficial central bank. Ironic, isn't it?

All the red flags are there: seizure of accounts (850 million that is), being looked into by the authorities, difficulty getting banking support (Tether changed banks a lot), the links with a shady exchange which are very strong (BitFinex), throwing up lots of smoke and mirrors, etc. 

Yes, I do hope that when the entire thing implodes that the damage will be limited. But BTC better be north of 20k when that happens, as a lot of fresh money will be needed to keep up the value of it. Mind you: BTC's value could have been totally artificially inflated for over 2 years already.

Interesting. All exchanges should in that case immediately unlist USDT and disable any possible connection to USDT to prevent a crypto meltdown.

USDT (Weimar Republic toilet paper) holders will try to buy top 10 crypto's and will be checking out at major exchanges. This is a serious red flag!

Edit:

If you have read the below information then it will become clear that if you are a holder of USDT or LEO token you should exchange your holdings for fiat at Bitfinex asap. Also please do not sell for fiat at other exchanges as to reduce systemic risk.

Source: https://cryptopotato.com/bitfinex-and-tether-usdt-in-trouble-nyag-calls-leo-1b-ieo-a-securities-offering/

Edited by cryptoxrp

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Posted (edited)
37 minutes ago, cryptoxrp said:

Interesting. All exchanges should in that case immediately unlist USDT and disable any possible connection to USDT to prevent a crypto meltdown.

USDT (Weimar Republic toilet paper) holders will try to buy top 10 crypto's and will be checking out at major exchanges. This is a serious red flag!

Systemic risk. This is the closest crypto can get to it, really. 
I  expect some exchanges to fall over when it happens. Lots of people wil be left in the dust too, that were unfortunate enough to hold USDT at the moment it all unravels. 

Edited by Parabellum

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Posted (edited)
4 hours ago, Julian_Williams said:

I have heard that OTC prices are usually above market prices.  Big institutions make OTC buys because their big orders would push up the price more than the premium they pay OTC.  The opposite is true for OTC sellers.

@Julian_Williams you can derive avg price from quaterly reports. Institutional sales in USD/escrow sales. Last time I got 0,08USD/XRP = 62mil USD from institutional sales/700mil XRPs released from escrow. Maybe some got XRPs for less and some not. So I think 0,08USD is the absolute bottom where we can get.

Edited by Spartaksus

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11 minutes ago, Spartaksus said:

@Julian_Williams you can derive avg price from quaterly reports. Institutional sales in USD/escrow sales. Last time I got 0,08USD/XRP = 62mil USD from institutional sales/700mil XRPs released from escrow. Maybe some got XRPs for less and some not.

https://ripple.com/insights/q1-2019-xrp-markets-report/

Institutional direct sales: $61.93 million.
Programatic sales: $107.49 million.

Also, note the last phrase regarding the 700 million:
xrp_q1_2019_markets_report_escrow_activity.png.48da41e5dd9df8056b11ae9d32fc38ae.png

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Posted (edited)
4 hours ago, cryptoxrp said:

The last few months many of us felt the frustration of the price of XRP being pushed down by 'various factors'. A development which contradicts all the good news that is flowing in. So what is happening and what can Ripple do to put up a line of defence against the selling pressure? I would like to invite anyone to give their ideas and thoughts about this issue and help Ripple gain a better understanding on how to manage the present XRP Escrow and help them to stabilise the XRP price at a higher level in order to improve 'XRP liquidity'.

To start of I have made a small list of possible ideas which could give this discussion some direction. All input is very welcome!

1. Ripple should yearly set a minimum price (at least 20 % higher than the market price) for selling XRP to intitutions, large investors and banks. Also Ripple should communicate this price publicly. If for example the minimum XRP price would be the same as the market price with a 20 % uplift then institutions would to some extent (depending on the amount they want to buy) buy in the open market because that would be cheaper. However, if intitutions, large investors and banks would want to buy very large amounts of XRP (more than available in the open market) than it would be interesting for them to buy directly from Ripple at a higher price. By doing this Ripple creates an incentive for intitutions, large investors and banks to buy in the open market and support the XRP minimum price.

2. Set a maximum amount of XRP that can be sold to one specific buyer and categorise the entities that can buy more XRP depending on their structural role within the XRP ecosystem. For example a TIER 1 bank or central bank may buy more than TIER 2 or TIER 3 banks and large private investors much less. Publicly communicate this information.

3. Improve the XRP Escrow by reducing all new XRP Escrow releases to 100 million XRP every month. Also create the possibility to sell XRP prior to the release of XRP still in escrow.

1- “Ripple should yearly set a minimum price (at least 20 % higher than the market price)” This assumes it is a seller’s market and potential buyers are queuing up to buy at a price higher than market price. Very different from reality, I think!

2- “Set a maximum amount of XRP that can be sold to one specific buyer” I think Ripple, at the moment, will be selling XRP to anyone interested in buying it. Let alone dictating any Tiers or queues for purchase. The more people/firms are voluntarily willing to purchase XRP for whatever purposes, prices automatically goes up (provided Ripple doesn’t dump enough to satisfy every demand out there). Given the large escrow it holds, and given the stage of adoption XRP is in, it appears that Ripple is indeed in a position to meet any surge in demand for XRP (at least for now), which effectively means price staying low.

On the other hand, if Ripple is indeed genuine in what it does and what it says, it would be in their interest to keep the prices of XRP low so that it can encourage more potential buyers to participate in the market and incentivize them to buy XRP and thus spread XRP wider. Spreading the XRPs as far and wide as possible is perhaps the only way to finally meet its objectives after all. 

 

Bottom line: It is difficult to see prices increasing much until the escrow depletes and when that happens the XRP ecosystem would've developed quite a bit and matured and that is when you will start experiencing real increases in price driven by value. 

Edited by MalluJohn

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8 minutes ago, Socrates said:

Institutional direct sales: $61.93 million.

Yes that´s correct so I guess they sell XRP from escrow only to institutions via OTC.

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Best way forward is to reduce XRPs in escrow by burning/cancelling 40-50b tokens. Or for limiting escrow to 4-5 years with all unused tokens burned but not extending escrow life.

This beats plow back of unused or unbought tokens for unlimited escrow life.  Currently, there are few incentives to hold zerps given the huge supply which is why any good news result in price reset to former levels.

Price stability means buying to support price higher but selling to reduce excessive demand/buying.  

Think we’re not looking for XRP as a stablecoin.

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Posted (edited)
28 minutes ago, Spartaksus said:

Yes that´s correct so I guess they sell XRP from escrow only to institutions via OTC.

52 minutes ago, Spartaksus said:

@Julian_Williams you can derive avg price from quaterly reports. Institutional sales in USD/escrow sales. Last time I got 0,08USD/XRP = 62mil USD from institutional sales/700mil XRPs released from escrow. Maybe some got XRPs for less and some not. So I think 0,08USD is the absolute bottom where we can get.

(my emphasis & underline)


Might be misunderstanding your intention with that statement, but the value you used there to try and determine the price per XRP omitted the Programatic sales' income ($107.49 million), which is separate from the Institutional direct sales ($61.93 million), but is still part of the XRP sales from the same pot.

39 minutes ago, Socrates said:

Also, note the last phrase regarding the 700 million:
xrp_q1_2019_markets_report_escrow_activity.png.48da41e5dd9df8056b11ae9d32fc38ae.png

That last phrase could mean that they may have not sold (directly to institutions + programmatic) all of the 700 million XRP that didn't return to the escrow (and that you've assumed it was all sold).

If this is confirmed, then the average price becomes much greater than the $0.24 ≈ (Institutional + Programmatic sales) / 700 million XRP would indicate (if all 700 million had been sold), which on its own is already much greater than the $0.08 you mention.

Edited by Socrates
clarification

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Posted (edited)
50 minutes ago, Socrates said:

https://ripple.com/insights/q1-2019-xrp-markets-report/

Institutional direct sales: $61.93 million.
Programatic sales: $107.49 million.

Also, note the last phrase regarding the 700 million:
xrp_q1_2019_markets_report_escrow_activity.png.48da41e5dd9df8056b11ae9d32fc38ae.png

@Socrates thanks for your info. Especially the last sentence "The remaining 700 million XRP not returned to escrow are being used in a variety of ways to help support the XRP ecosystem" is a serious red flag".

1. Ripple has allways stated that unsold escrowed XRP would be returned to escrow at the end of the month. What has happened here?

2. The not returned XRP are used in a variety of ways.... What ways? Are they used for paying salaries, investments in blockchain start-ups, marketing activities, Ripple operations....? Red flag!

The two above points are 'very disturbing' and make quite clear that Ripple is not standing by their promise to return unsold XRP to the escrow facility. It also supports the thought that their operations are not yet covered by sales activities (in other words Ripple probably still has a negative cash flow).

If any of Ripple personell ( @JoelKatz ) is reading this thread please pass on the above observations. We need to trust Ripple to do what they promise. This is definitely not the way to go forward if you want XRP holders (or anyone for that matter) to trust you.

Advise: When investing 'fiat generated by XRP sales' target the largest payments infrastructure companies (Like Moneygram, well done!) and please be much more specific to whom and how much XRP is sold (programmatic sales). If to much XRP enters the ecosystem without sufficient support/use the value will drop (this is a balancing act).

Edited by cryptoxrp

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46 minutes ago, MalluJohn said:

Bottom line: It is difficult to see prices increasing much until the escrow depletes and when that happens the XRP ecosystem would've developed quite a bit and matured and that is when you will start experiencing real increases in price driven by value. 

Tnx for your thoughts.

Personally I believe that at this stage the XRP corridors will be needing more and more liquidity as transactions are increasing in the direction of the 2018 ATH. See earlier threads (with graph support) about that fact. A higher sustained XRP price will provide more liquidity but how fast it is really needed is everyone's guess.

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Posted (edited)
28 minutes ago, cryptoxrp said:

1. Ripple has always stated that unsold escrowed XRP would be returned to escrow at the end of the month. What has happened here?

https://ripple.com/insights/ripple-escrows-55-billion-xrp-for-supply-predictability/ - DEC 07, 2017

Quote

Here’s how the escrow works:

(...)

We use Escrow to establish 55 contracts of 1 billion XRP each that will expire on the first day of every month from months 0 to 54. As each contract expires, the XRP will become available for Ripple’s use. You can expect us to continue to use XRP for incentives to market makers who offer tighter spreads for payments and selling XRP to institutional purchasers.
We’ll then return whatever is unused at the end of each month to the back of the escrow rotation. For example, if 500M XRP remain unspent at the end of the first month, those 500M XRP will be placed into a new escrow account set to expire in month 55. For comparison, Ripple has sold on average 300M XRP per month for the past 18 months.

(my emphasis & underline)

You could argue from this that they are still keeping what they originally promised (which is different from what people assume/perceive/interpret). They are using it, just not necessarily selling it. Even if there were any legal contract binding this, most contracts are allowed to be terminated or amended, especially given changes in conditions.

Agree that Ripple could communicate better and more clearly, but as conditions change, it's normal for tactics to also change, while keeping in line with the vision and strategy.

Also keep in mind that if Ripple were to force the whole monthly billion of XRP, that is released each month from escrow, into the market (sales, incentives, etc), it would be much worse for the short term price. 

Edited by Socrates
clarification

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