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Fund Instant Cross-Border Payments With a Line of Credit From RippleNet


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On 10/15/2020 at 5:15 PM, BillyOckham said:

The fact that they removed the public buy side pressure in these line of credit cases doesn’t seem to talked about yet.  Are we all keeping quiet about it hoping it goes away somehow?  Admittedly the volumes thus far are insignificant,   but if this catches on...

But they also removed the public sales of xrp from ripple wallets to exchanges. Banks can still purchase xrp with their own money to save the 4% interest fee

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35 minutes ago, jargoman said:

But they also removed the public sales of xrp from ripple wallets to exchanges. Banks can still purchase xrp with their own money to save the 4% interest fee

Those two things are separated in time and nature though aren’t they?

Unless I’m mistaken the sales stop happened ages ago and was nothing to do with this line of credit. 
 

Where did you see the 4% figure?  I have perhaps missed some relevant info on this thing.

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5 hours ago, BillyOckham said:

Those two things are separated in time and nature though aren’t they?

Unless I’m mistaken the sales stop happened ages ago and was nothing to do with this line of credit. 
 

Where did you see the 4% figure?  I have perhaps missed some relevant info on this thing.

What I'm saying is for every xrp lent to banks is an xrp removed from ripples stack which would have been sold on the open market. 

The 4% came from a tweet. It was 4-10% I think but not sure

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I may be missing something, but if you are Ripple, maybe you can:

1)      Lend for example $100 worth of XRP

2)      Get repaid for that loan $102

3)      Buy back XRP in open markets for $101 or $102

Doing that you:

1)      Buy back from markets more than is being sold ($101 or $102 vs $100) -> you create pressure on the price of XRP to go up

2)      Reduce the amount of XRP in circulation -> you create pressure on the price of XRP to go up

3)      If you choose to buy back for $101 instead of $102, you increase the amount of cash you have at your disposal

And since you are the biggest holder of XRP, you win on all fronts?

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47 minutes ago, XRP-Observer said:

3)      Buy back XRP in open markets for $101 or $102

That the step that I doubt they will do.  You are assuming a very altruistic, and I think, unrealistic attitude on Ripples part.

 

And if they don’t do that step then unfortunately all they’ve effectively done is remove buy side pressure.  It’s true that increased usage may indirectly and eventually increase demand and therefore price,  but that is a hope more than a likelihood.

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34 minutes ago, BillyOckham said:

That the step that I doubt they will do.  You are assuming a very altruistic, and I think, unrealistic attitude on Ripples part.

 

And if they don’t do that step then unfortunately all they’ve effectively done is remove buy side pressure.  It’s true that increased usage may indirectly and eventually increase demand and therefore price,  but that is a hope more than a likelihood.

It might not be about altruism, they might make more money in this process than just by selling XRP they have.

If they just keep selling XRP, its price will go down and their 50+ billion XRP become worth less and less. They can do it only for some time before it gets unsustainable. The value of the entire company will go down, ODL will never be able to grow.

On the other hand, if they keep rebuying XRP according to my scenario, the price of XRP can go UP, the value of their 50+ billion XRP will go up, they will have even more XRP, the value of the company will go up, ODL will be more useable thanks to growing liquidity, which could drive demand for this product up and accelerate and grow this circle of lending and buying back. To me it makes more sense to buy XRP back, if they want long term success. Especially when they can earn cash doing it.

But again, I am just speculating, I am not saying they will do it, I don't know, I am just trying to see if my theory has any serious flaws. There is of course one condition, there must be a substantial demand for Line of Credit for this to work.

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1 hour ago, XRP-Observer said:

To me it makes more sense to buy XRP back, if they want long term success. Especially when they can earn cash doing it.

Well I hope you are right but if 2020 has taught me anything it’s that hopes are the first to go.  :) 

Time will tell.  If you are correct then it will be good for all of us.

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2 minutes ago, BillyOckham said:

Well I hope you are right but if 2020 has taught me anything it’s that hopes are the first to go.  :) 

Time will tell.  If you are correct then it will be good for all of us.

I must admit that when I first saw Line of Credit, I was like: "Oh, great, another way for Ripple to sell XRP..."

Only later this idea about the combination of lending and buying back came to my mind and I thought it might not be bad, quite the contrary.

As you say, as XRP holders we've been through some rough times, so it's not easy to think positive. I agree, time will tell and I sure hope something like this plays out, it's about time.

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2 hours ago, XRP-Observer said:

I must admit that when I first saw Line of Credit, I was like: "Oh, great, another way for Ripple to sell XRP..."

Only later this idea about the combination of lending and buying back came to my mind and I thought it might not be bad, quite the contrary.

As you say, as XRP holders we've been through some rough times, so it's not easy to think positive. I agree, time will tell and I sure hope something like this plays out, it's about time.

it also makes sense from a psychological perspective to buy XRP back. Very much similar as stock-by-backs used by any large company.

 

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