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kanaas

Mexicans Sending Home Record Cash

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Posted (edited)
3 hours ago, kanaas said:

Mexicans Prepare for Worst by Sending Home Record Cash

Meaning ODL wasn't that great as a "succes" - rather normal as the whole market spiked....

Perhaps that accounts for the huge spike in ODL to Mexico in the middle of last month, which has now dropped back again?

Screenshot_2020-05-05 liquidity-index XRP MXN - Google Drive.png

Edited by Julian_Williams

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8 minutes ago, Julian_Williams said:

Perhaps that accounts for the huge spike in ODL to Mexico in the middle of last month, which has now dropped back again?

That is the index, not volume (the potential, not actual).
Here is the token volume in trades - keep in mind to account for the pricing jump in late April (ie less volume for same value transfer).
Looks like a fairly consistent pattern overall. 
 

Screen Shot 2020-05-04 at 5.42.33 PM.png

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8 hours ago, JASCoder said:

That is the index, not volume (the potential, not actual).
Here is the token volume in trades - keep in mind to account for the pricing jump in late April (ie less volume for same value transfer).
Looks like a fairly consistent pattern overall. 
 

Screen Shot 2020-05-04 at 5.42.33 PM.png

Looks like a consistent downtrend. :(

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51 minutes ago, SquaryBone said:

Looks like a consistent downtrend. :(

isn't it the opposite, the value of the tokens has risen during this period whilst the vol has remained fairly level - a very slight reduction.  The increase in value more than overcomes the slight downtrend in volume.

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2 hours ago, Julian_Williams said:

isn't it the opposite, the value of the tokens has risen during this period whilst the vol has remained fairly level - a very slight reduction.  The increase in value more than overcomes the slight downtrend in volume.

True. What I don't get is how the index seems to be moving differently.

Isn't it better to use a dollar value to see how volume increased (so the amount of dollars that get moved). I know there's a varying exchange rate but if USD is the reserve currency... 

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7 hours ago, JASCoder said:

That is the index, not volume (the potential, not actual).

I'm trying to grasp what the liquidity bot exactly is. Looking at it (the excel sheet) in more detail, I would argue it is more a measurement of 'baseline volume' than 'potential liquidity'. 

So, the liquidity bot is based on daily measurements of volume and volatility.

Imagine a market that is completely based on speculative trading, no 'utility'. Then, if there is no volatility, there is no reason to trade and hence no volume. Only if the prices start moving, then new trades will be made.

But now imagine a market where there is a constant influx of utility. This constant flow of orders are matched (with ODL) and this creates constant extra volume. Even if the volatility is zero. And this is exactly what the liquidity bot tries to measure, the expected volume if the volatility would be zero (measured by plotting 28 days of volume/volatility and calculate the 'intercept' through the 0% volatility line).

So it is more a measurement of a baseline volume that is existent, regardless of speculative trading. This number is an indication of the volume of ODL transactions. (which is consumed liquidity, not potential liquidity)

Anyways a lot of assumptions in the calculations I think which make it less accurate, e.g.

  • The model assumes ODL is not influencing the price and hence not influencing volatility. (I think this is correct assumption)
  • Volatility is only measured by highest and lowest price on a day, not the movements in between
  • Times of relative higher speculation (higher volatility) influence the calculated ODL negatively (and vice versa)

 

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3 minutes ago, Xrpiet said:

Completely agree with you, @jn_r. It's very sensitive to outliers as well:

 

Thanks, I hadn't seen that post yet. I was thinking of adding some of those scatter plots to my post, but was too lazy :) Yet here they are. I think they are also too 'scattered' to draw the right conclusions 

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7 hours ago, Julian_Williams said:

isn't it the opposite, the value of the tokens has risen during this period whilst the vol has remained fairly level - a very slight reduction.  The increase in value more than overcomes the slight downtrend in volume.

I really need to find the time to switch over this chart's code to show the value in USD - as a few people had suggested back when I first made it lol
SMDH

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7 hours ago, Julian_Williams said:

Crypto Eri made some very interesting analysis of the Mex cross border payments in this original video and explains why ODL is very competitive in this market.

This was a good piece, and I even replied to her tweet about her FX Rate observations ...

To the effect of how the slippage costs can be with indeterministic FX rates. This is no doubt why you see near zero trades on XRP on Bitso exchange during weekends.

ODL didn't start out with that weekend behavior, and I was costing out the slippage, and would see really weird volatility in the costs. I finally discovered it was related to the off hours FX rate fluctuations and uncertainties - this is still having an impact in crypto trading (i've been researching this lately). 

If you think about it... FX rates are set just like how the price of equities and commodities are set: By the markets. So when the markets are closed, there's no trading.

But teh crypto don't never sleep y'all... 

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6 hours ago, SquaryBone said:

True. What I don't get is how the index seems to be moving differently.

Isn't it better to use a dollar value to see how volume increased (so the amount of dollars that get moved). I know there's a varying exchange rate but if USD is the reserve currency... 

Yes, I need to re-write my code for that chart (it's on my TODO heh).

If you want to better understand Tenitoshi's index, you can read about it here (scroll down to "The Liquidity Index - a common misunderstanding"):

https://coil.com/p/karstnDE/Tracking-utility-on-the-XRP-Ledger-Analysis-of-tools-and-a-forecast-attempt/9xvuwpju 

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5 hours ago, jn_r said:

I'm trying to grasp what the liquidity bot exactly is. Looking at it (the excel sheet) in more detail, I would argue it is more a measurement of 'baseline volume' than 'potential liquidity'. 

If you want to better understand Tenitoshi's index, you can read about it here (scroll down to "The Liquidity Index - a common misunderstanding"):

https://coil.com/p/karstnDE/Tracking-utility-on-the-XRP-Ledger-Analysis-of-tools-and-a-forecast-attempt/9xvuwpju

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