Locking up Ripple's XRP with Crypto Conditions

[Guest]

8 minutes ago, Jcapathy said:

The statement that the XRP team knows how to depress the priceof XRP is actually true.

we have OFFICIAL statements saying Ripple do NOT manipulate price nefariously

[jp2017]

2 hours ago, lucky said:

Too high for us to buy more!

What xrp "too high for us to buy more!" Don't have a problem with that... No Sir! 

[Apollo]

2 hours ago, Jcapathy said:

1. Does the cross border payments that can be made with Ripple reliant on Ripple's price to below for there to be savings for the banks? If  thats the case  then the statements arent ridiculous, they just show that Ripple has a business  plan that is not congruent with what most investors would put their money into. 

2.If Ripple has no problem depressing the price can you also try to raise it? That is if #1 is not the case? 

Miguel I dont have any beef with you but your responses to the posts on here are less than comforting, in fact  after reading your replies all I want to do is sell all my Ripple. 

"Ripple has no problem keeping the price down" HA that should have NEVER been said much less posted  for all  to see. 

 

 

 

 

11

I am not sure what you mean by #1. But the price will need to go up for XRP to act as an effective bridge between assets. SO Ripple needs the price to go up for XRP to be useful. People are laughing at the concept of the price getting too high because it is silly. The only downside would be adding to volatility or price instability.

I think you are missing the joke. There is a history of Ripple releasing good news followed by an inexplicable price drop for XRP. I’m not sure if this is a real market trend or just confirmation bias, but either way, it has turned into a joke around here. The joke being that, the crypto market is entirely irrational when it comes to Ripple. If only Ripple suffered from a hack, forked the network and had no clear real-world application... XRP would be like 50X the price. 

Edited March 28, 2017 by Apollo

[Jcapathy]

What I mean by #1 is simple. Let me quote from a previous post on this site... "XRP is unique in that it has a very clear and meaningful use case (low cost value transfers). Any incentive should be geared at increasing adoption and use of XRP for its intended purpose. We know Ripple plans to directly incentivize liquidity to this end."  Why would the price of XRP going up EVER be of concern to the group that created it? Well, in my estimation the only reason that could ever be an issue is the company who is reliant on big business, Big banks etc to adopt their cross border payment platform makes their product suitable at a certain level of value. e.g. low price = lower cost in basis points for cbt (crossborder transactions).  

Second, Im not missing the joke at all pal. In fact I get regular emails from Ripple Insights, I have a FinTech Company, I am an avid investor in Ripple and increase my position every time I hear, for example 47 Asian banks are running CBT tests and successfully lowered the cost basis from 25 basis points to 8 basis points. Then, inexplicably the ripple I purchased at 690 dropped to 490 within what seemed like minutes of the "good news".  

My point with all this is I am an avid investor, believer, and soon to be implementor of Ripple technology. I believe the future of the banking world and big business will be transacted in ripple or a similar technology.  Those of us who are early adoptors, supporters, and of course investors should be rewarded for our investment with a future increase in price/value, and the ability to save, spend, etc.

Not a noob bud, just a noob here. 

 

[Apollo]

1 hour ago, Jcapathy said:

Why would the price of XRP going up EVER be of concern to the group that created it? Well, in my estimation the only reason that could ever be an issue is the company who is reliant on big business, Big banks etc to adopt their cross border payment platform makes their product suitable at a certain level of value. e.g. low price = lower cost in basis points for cbt (crossborder transactions).  

Not a noob bud, just a noob here. 

 

3

I will risk unintentionally offending you again to address your worry. 

The cost of the payment does not change with the price of XRP. If you want to make $10 payment it will always cost you  $10 worth of XRP, plus the spread, no matter what the price of XRP is. Price has two primary impacts on the spread. 1. If the price is moving a lot ie. there is high volatility, then market makers need to leave a wider spread to cover the uncertainty of expected price movement. And 2. the price impacts the perceived value of XRP and can drive more people to buy it. When more people buy XRP and use XRP then more people are competing for bids and asks. This adds liquidity to the market and makes spread smaller. Liquidity also reduces volatility because having more offers on the books means that anyone consuming those offers will not be able to move the price as much.

 @JoelKatz comments about the price were in regards to the former effect (not being able to smooth price movement.) Note that actions to mitigate volatility are meant to reduce price movement and NOT price. volatility (in the absence of a tulip craze) is not tied to the price of the asset. In other words, a high-priced asset can have low volatility or high volatility. In the context of XRP a high priced XRP is likely to lower volatility because of the increased demand and higher resulting liquidity. This is probably why @JoelKatz said he did not see this as much of a problem. The only downside is basically that Ripple gets pumped and dumped, and this really would not be the end of the world. There are big upsides Ripple is fully aware of to counter that small downside including, Ripple's increased ability to incentivize liquidity and grow the market, and more external publicity and use of the network. These are all things Ripple wants. To sum this up Ripple wants XRP to have the highest long-term price it is capable of having. The only caveat is, Ripple would also like to have lots of XRP when it gets there.  

Edited March 28, 2017 by Apollo

[Jcapathy]

8 minutes ago, Apollo said:

Market makers need to leave a wider spread to cover the uncertainty of expected price movement.

11 minutes ago, Apollo said:

To sum this up Ripple wants XRP to have the highest long-term price it is capable of having.

My intention is not to come across as offended, rather, my intention is to open the  lines of dialog because we all have a symbiotic goal as you so eloquently put it below Ripple, XRP (and Me) want to have the highest long term price possible.

I do need to know though,  Exactly who are these "Market makers" that will be hedging volatility with a "wider spread"? and in the hypothetical world of the Maker Taker market place your analysis is accurate as to what the outcome would be of however in the world of Cryptocurrency exchanges that I deal in the "market makers" are the buyers and sellers of the particular coin. The spread is set by what the buy and sell offers are so Im not exactly sure how your response has any germain bering on the conversation. Simply put If Ripple was traded on the floor of the CME then #1 and #2 have merit but in the absence of a Maker Taker system as we all know it with a Market Maker and the people that purchase directly from the Market Makers book. If that were the case then the market maker would hedge his positions with put and call spreads, not rely on liquidity to make spreads smaller.  HAHA good try though. 

Now, to address the pump and dump, I wish Ripple would get pumped and dumped. That would at least move the price over a penny and hold it there for gods sake. I mean Ripple is at least a dollar per coin in the short term and hopefully more long term. IMHO. 

[Apollo]

1 hour ago, Jcapathy said:

My intention is not to come across as offended, rather, my intention is to open the  lines of dialog because we all have a symbiotic goal as you so eloquently put it below Ripple, XRP (and Me) want to have the highest long term price possible.

I do need to know though,  Exactly who are these "Market makers" that will be hedging volatility with a "wider spread"? and in the hypothetical world of the Maker Taker market place your analysis is accurate as to what the outcome would be of however in the world of Cryptocurrency exchanges that I deal in the "market makers" are the buyers and sellers of the particular coin. The spread is set by what the buy and sell offers are so Im not exactly sure how your response has any germain bering on the conversation. Simply put If Ripple was traded on the floor of the CME then #1 and #2 have merit but in the absence of a Maker-Taker system as we all know it with a Market Maker and the people that purchase directly from the Market Makers book. If that were the case then the market maker would hedge his positions with put and call spreads, not rely on liquidity to make spreads smaller.  HAHA good try though. 

Now, to address the pump and dump, I wish Ripple would get pumped and dumped. That would at least move the price over a penny and hold it there for gods sake. I mean Ripple is at least a dollar per coin in the short term and hopefully more long term. IMHO. 

13

In this context, a Market Makers holds open offers with currencies pairs to facilitate payments made using multiple currencies. Ripple and ILP both allow payment paths which consume offers on multiple order books. MM's provide some of the necessary liquidity. 

You are right that much of the risk associated with volatility can be hedged through options. However, options are not free. So not all the risk can me mitigated. Volatility has a known and measurable effect on spreads (not that I know how to do this). In the context of payments, even relatively low added cost isn't great because you are dealing with a high volume low margin business mottle. 

 

[Jcapathy]

Can you explain to me who these "Market Makers" are? 

[Apollo]

37 minutes ago, Jcapathy said:

Can you explain to me who these "Market Makers" are? 

It's more of a role and less of an identity. You could be one if you want. But I gather that there are Wallstreet HFT firms or hedge funds looking for something to do with their money or whoever all else wants to and has money and institutional competence. Some gateways do it themselves... or have done in the past anyways. 

Edited March 29, 2017 by Apollo

[Jcapathy]

Maybe we should set up a meeting to discuss the possibility of that my plans to implement a Ripple gateway for something that hasnt been done. 

Let me know who I should be talking to and maybe some contact info. 

Thanks for the response. I truely didnt think you were going to answer the question.  I already knew what the answer was, I just wanted to see what the answer was. You passed. 

Thanks- JC 

 

[Jcapathy]

What your answer was that is. 

[ObservantOne]

On 3/23/2017 at 4:16 PM, Apollo said:

I would lean toward locking up more rather than less. The less XRP Ripple has at hand at any given time the more their total stash would be worth. I don't think a lockup would provide much certainty unless it actually limited Ripple's available supply to something the market might reasonably handle. I think that is probably in the area of 1.5-4 bill per year, with a 1-3 bill reserve held outside the lockup.

 The point I was trying to make was that a structure like this would--counterintuitively-- lead to increased real-world flexibility due to a lower supply and vast improvements in market certainty. Practically, Ripple or anyone else for that matter will be limited to selling only a few bill per year without dramatically impacting the price. So even if Ripple wanted to sell like 20 Bill in one year to a single buyer, that buyer could not turn around and sell (on market) without functionally destroying their own investment. So even if the XRP are under lockup, Ripple could sell them a contract to deliver the 20 Bill over the next 10 years, without affecting the utility of the XRP they deliver. In fact, I would argue that people would be willing to pay more for this contract (if Ripple had a limit of 3 BIlll a year or so) then Ripple could receive by selling 20 Bill outright without a lockup in place. Even if Ripple sharply limited its payout to .5 Bill or so, I think they would still be in a better position because the scarcity would massively impact the price.

Another benefit of this plan is it signals to the market that Ripple will remain tied to the fate of XRP. If Ripple cannot get out of the XRP game until the last of their XRP are delivered in 30 years, this could help provide institutions with greater certainty that if they build something on RCL, or use XRP directly Ripple has a long-term interest in providing support to their project. 

I was thinking about the lockup topic today quite extensively. 

Yes, yes, old thread. I get it.

When thinking about this whole venture from the perspective of a "layman", I see a company that is working really hard to snare the public interest by working with banks that the majority of the public probably uses, while spreading ILP/RCL and XRP to the banks. Not to say that this is exactly what is going on, just what I see. 

I read your thoughts on a lockup proposal. I googled "How many banks are there in the world" and the top result is "14,600 +/- 1500 banks worldwide." 

What if each bank had 1 million XRP? 1million x 14,600=14,600,000,000.

There are a lot more XRP than that! What about if they gave them each 5 million?! That would be 73billion XRP! My point is: how much exactly does Ripple think they will need? Could they afford to lock away 10 Billion (for X amount of time) while simultaneously implementing some sort of escrow pushing for mass adoption of RCL and XRP utilization? They could keep 3 billion in the company account, no? Do they need more than that? How are operational costs covered? I am sure that every employee has XRP. My thoughts were: if all the banks in the world that handle cross-boarder payments all utilized the entire ~99billion XRP, and all 99billion are used in the FOREX, worth ~$5 trillion, that is a total of $50/XRP. 

BUT, this completely neglects to take into consideration that there are investors out there, like us, who hold/will come to hold large amounts of XRP. That should raise the price a bit, right? Now, what if Ripple focused on an aggressive, widespread push to get as many banks as possible to implement and utilize the RCL, not solely focusing on JUST the larger banks (though, I cannot argue with the logic!)? They will need to sell XRP to institutions at a lower rate than the general public, given stability in the market, in order to have XRP more widespread. The more places XRP is, and can be used, the larger and more stable the market?

Personally, it doesn't instill confidence that XRP can/could go to a dollar if Ripple holds the majority of the zerps. Doesn't make sense to me. That would make the company waaaaaAAYYY too powerful in the lnog run. 

I am really trying to understand all of this, and it can be overwhelming at times. I do not have the years of investing/work experience that quite a few individuals have. But I feel like I am on to something. It has paid off so far  

Honestly, I don't know. I am now running on no sleep, my eyes are bugging out, I feel restless. Crashing!

Sorry if there are errors in my typing OR my thinking.

Hoping to hear back from knowledgable people!

 

-TheOne

[Apollo]

1 hour ago, ObservantOne said:

Personally, it doesn't instill confidence that XRP can/could go to a dollar if Ripple holds the majority of the zerps. Doesn't make sense to me. That would make the company waaaaaAAYYY too powerful in the lnog run. 

 

 

 

2

That would only be 50 Bill. Which is a lot but not that large in the scheme of things'. 

I see a lot of people with this worry, but I believe it may be somewhat misplaced. Many companies are much bigger then Ripple would be with a $1 XRP. Wells Fargo for example, has a market cap of 276 Bill. It's true that Ripple would be making its money in a rather unique way, by directly creating it and then making it useful. However, I don't think there is anything different about this form of wealth concentration or creation. 

I think many people feel that control over a currency will give Ripple a fundamentally greater or a  more coercive type of power than that instilled in Apple or Google for example. It is true that large corporations have disproportionate social power in many ways, but I don't think there is anything that would make Ripple more dangerous than other industry giants.

One thing to keep in mind is that Ripple does not actually have anywhere near the control over XRP as it might seem.  They are functionally prohibited from increasing the supply without a super majority because people would ignore that change to the network possibly leading to a fork or even if the change was accepted it could irreparably damage their image (trust is an extremely important asset when dealing with money).  What this means is, unlike most other companies, they can only use or sell this product once. They are also limited by the realities of the market. The more Ripple uses or sells XRP, the less it is worth. Not only that, but their sales and use need to be predictable and even. What all this means is Ripple's set of XRP actions are and always will be extremely limited. I think their only reasonable profit-maximizing option is to engage in very slow, steady and clear distribution. That is just not the kind of tyranny revolutions are built to fight. 

Edited April 3, 2017 by Apollo

[Live4xrp]

AAPL MC is almost $ 1 trillion....Ripple is unique, so a MC of over $500 billion will not be a suprise and is well deserved!

[Jcapathy]

Just now, Live4xrp said:

AAPL MC is almost $ 1 trillion....Ripple is unique, so a MC of over $500 billion will not be a suprise and is well deserved!

IMHO $500Bn MC for Ripple is just the start. If XRP ultimately has the utility that everyone thinks it does, those who saw the value early, (and those who were able to amass a large amout of XRP), could possibly become the worlds first Trillionaires.  Eat your Heart out Bill Gates.