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Is CoinCheck refuelling on XRP?


Xi195
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CoinCheck shut down trading of XRP because of poor liquidity. 

Around seven hours ago Ripple sent 71.4M XRP to an account I believe belongs to CoinCheck: https://bithomp.com/explorer/rBPzVkmhGyuVgycQMKFJj8NwREg1ZWLTKg  

Fuelling up the rocket or watering down the propellant?

Would love to see some of the new members debate the topic below. 

Edited by Xi195
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13 minutes ago, Xi195 said:

CoinCheck shut down trading of XRP because of poor liquidity. 

Around seven hours ago Ripple sent 71.4M XRP to an account I believe belongs to CoinCheck: https://bithomp.com/explorer/rBPzVkmhGyuVgycQMKFJj8NwREg1ZWLTKg  

Fuelling up the rocket or watering down the propellant?

Would love to see some of the new members debate the topic below. 

seems like clearly CoinCheck had run out  between moving hands... and badly needed more. And clearly seems like Ripple "fed" this into incoming demand on request. this is opposite of anything close of dump. Also mostly this is lending rather then sale, as sale agreements for this magnitude cannot be whipped in a jiffy.  but that's just happy guess.

Lets not forget, not releasing coins when needed and killing liquidity is also a disaster, not just over release of coins. Hence, seems like they are disbursing coins on demand and on request. Now we can argue all demand should end up in price increase, but that's not how ti works.

So I would say they are very responsible and doing it right ! and this is a good move, to give when and what is needed. 

Edited by R8102V1D2D
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40 minutes ago, R8102V1D2D said:

Also mostly this is lending rather then sale, as sale agreements for this magnitude cannot be whipped in a jiffy.  but that's just happy guess.

Lets not forget, not releasing coins when needed and killing liquidity is also a disaster, not just over release of coins. Hence, seems like they are disbursing coins on demand and on request.

A side question - as people are speculating that Ripple will lockup their XRP in escrow in the near-future, wouldn't that inhibit the company's ability to do this 'lending' action going forward, in times of need? (Or are my assumptions of how it works incorrect? Kindly correct me if I've misunderstood) 

Would this suggest that:
1. They will not be locking up their XRP (killing the widespread rumours on this completely)
2. They will only be locking up a small fraction of XRP as a demo of its functionality (and be underwhelming in the eyes of speculators)
3. There are ways of utilizing/lending XRP even while they are locked up? (e.g. in the form of collateral of sorts?)

 

Edited by Drkspirit
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36 minutes ago, Drkspirit said:

A side question - as people are speculating that Ripple will lockup their XRP in escrow in the near-future, wouldn't that inhibit the company's ability to do this 'lending' action going forward, in times of need? (Or are my assumptions of how it works incorrect? Kindly correct me if I've misunderstood) 

Would this suggest that:
1. They will not be locking up their XRP (killing the widespread rumours on this completely)
2. They will only be locking up a small fraction of XRP as a demo of its functionality (and be underwhelming in the eyes of speculators)
3. There are ways of utilizing/lending XRP even while they are locked up? (e.g. in the form of collateral of sorts?)

 

The more they lock up, the higher the value and utility of the coins they did not lock up. Yet they also need a buffer for unpredictable circumstances. Finding the sweet spot is key, both for Ripple and XRP holders, and I'm confident they'll find - or have found - that spot.

I'm hoping they somehow involve the IMF in the lockup. That would be something.

To continue my daydream, would it not be great if Jed donated his billions to rippleworks or some other genuine non-profit, instead of burning them on his ego trip.

Edited by Guest
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Just now, lucky said:

and I'm confident they'll find - or have found - that spot.

Hmmm while I'm also hoping this is the case - but seeing how they're currently having issues with increased volumes & activities, somehow that doesn't seem to suggest they are 'that' well-prepared in terms of future planning.......:rolleyes:

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7 minutes ago, Drkspirit said:

Hmmm while I'm also hoping this is the case - but seeing how they're currently having issues with increased volumes & activities, somehow that doesn't seem to suggest they are 'that' well-prepared in terms of future planning.......:rolleyes:

That's not really fair. You can't expect any software platform to scale up massively without unforeseen issues. Considering @nikb 's other thread regarding this issue, they are handling the sudden increase in volume exceptionally well.

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25 minutes ago, lucky said:

That's not really fair. You can't expect any software platform to scale up massively without unforeseen issues. Considering @nikb 's other thread regarding this issue, they are handling the sudden increase in volume exceptionally well.

Definitely agree on the point about software hitting unforeseen issues.
On that note though, I guess this would imply the recent spike in volumes have beaten their stress-testing scenarios? (either that, or that the projected scenarios weren't high enough) -- haven't come across what they're currently doing to address the volume increase though, hence could just be that I'm completely wrong and don't know what I'm talking about :D 

My point was mostly referring to how speculations and imaginations of future announcements can be rather disappointing (in comparison to what people have in mind...), rather than to suggest that Ripple's team aren't doing a great job at what they do :)

Meanwhile, would you mind sending the reference of the other thread you are referring to? Am curious to have a read also :)

Edited by Drkspirit
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1 hour ago, Xi195 said:

Fuelling up the rocket or watering down the propellant?

Looks to me like there is some serious refuelling going on. This and some other events taking place seems to be pointing to that. There is usually an upward push in price when this much xrp starts moving around if am not mistaken.

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Not sure what the fuss is about. It is 70M XRP.

It 'received' close to 3B XRP in the last years from Ripple's money service business ~XRP-II

Highly likely just an institutional investor buying XRP's from Ripple.

?

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5 hours ago, Eik said:

Not sure what the fuss is about. It is 70M XRP.

Not sure who is fussing. Many of the new members here are completely unaware of the fact that Ripple sells XRP over the counter. Just wanted to highlight that fact and see if we could spark some debate. 

11 hours ago, Drkspirit said:

A side question - as people are speculating that Ripple will lockup their XRP in escrow in the near-future, wouldn't that inhibit the company's ability to do this 'lending' action going forward, in times of need? (Or are my assumptions of how it works incorrect? Kindly correct me if I've misunderstood) 

Hey @Drkspirit 'this lending' in your quote above implies that these XRP were certainly lent to CoinCheck. I don't think this is the case. There is no way to say for sure, but I believe they bought them and here's why:

1. Why would an exchange with lots of drooling customers and no XRP to sell them want to borrow Ripple, put it on the market, potentially creating a price increase in XRP then have to pay back that same quantity of XRP at a higher price? For example, you borrow 1M XRP at $.15, that's a $150k loan. If the price of XRP jumps to $.2 when you need to pay back your 1M XRP, you now have to give them back 1M XRP at the cost of $200k. They might want to borrow due to reason two below, but that would imply they are also buying, not borrowing exclusively.
2. Borrowing XRP is a hedge against price fluctuations. Imagine the scenario in point one above, but also imagine you own the same amount of XRP you borrowed (1M). Now when the XRP you own goes up in price, the liability related to the XRP you borrowed (point one above) goes up, leveling out the overall price exposure. It works the other way too. If the price goes down in this scenario, the value of your XRP goes down, but the amount you need to spend to replace your borrowed XRP goes down as well. There are of course fees related to borrowing which should be nominal and I have not factored into the above scenarios.
3. This could have equally been a volume incentive sent to CoinCheck. Seems large for that, but that's another way Ripple uses/plans to use their stash.

You can see how lending and the hedging it produces is a powerful incentive for banks and liquidity providers to hold XRP and make markets without being unnecessarily exposed to price fluctuations. 

11 hours ago, Drkspirit said:

Would this suggest that:
1. They will not be locking up their XRP (killing the widespread rumours on this completely)

Ripple distributes XRP regularly. You can watch the address used for distributions at the link I provided at the top of this post. They also update their distribution numbers every Thursday at the bottom of this page: https://ripple.com/xrp-portal/. Since this is not some new strategy, it should not effect their intent to lock-up their XRP.

11 hours ago, Drkspirit said:

2. They will only be locking up a small fraction of XRP as a demo of its functionality (and be underwhelming in the eyes of speculators)

The purpose of a lock-up is to minimize uncertainty and provide predictability as to approximately how many XRP they will be distributing, or at least an upper bound (for example, they might limit their maximum distribution amount to 100M per month). Locking up a small amount of XRP will on slightly reduce this uncertainty. See JoelKatz's comment linked below. I would suggest you read through that whole thread if you're curious about a lock-up.

 

11 hours ago, Drkspirit said:

3. There are ways of utilizing/lending XRP even while they are locked up? (e.g. in the form of collateral of sorts?)

This is a good question. I don't know the answer but I believe there is. 

 

Edited by Xi195
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8 minutes ago, Xi195 said:

Hey @Drkspirit 'this lending' in your quote above implies that these XRP were certainly lent to CoinCheck. I don't think this is the case.

Hey @Xi195 thanks for the detailed reply - though to clarify, I wasn't implying that XRP were lent, but rather, it was more of a thought exercise based on a previous comment (quoted below):

11 hours ago, R8102V1D2D said:

Also mostly this is lending rather then sale, as sale agreements for this magnitude cannot be whipped in a jiffy.  but that's just happy guess.

I also agree that it would make much more sense to either sell (or giveaway) the XRP rather than lend (as you've mentioned, the interests on borrowing can be high and add up quickly). 

 

11 minutes ago, Xi195 said:

I would suggest you read through that whole thread if you're curious about a lock-up.

Not actually that curious about whether Ripple will lock up their shares, but more interested in what they'll do with that function. Hence, I'll read into it anyways :)

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Well, if they, let's say lock up some billions XRP for lending purposes, it would have 2 advantages:

- Banks/institutionals that want to use XRP but are not allowed (or don't want) to legally own XRP can participate in/grow the ecosystem

- the interest payments that Ripple reveives on the loans could function as some sort of constant dividend to its shareholders. This eliminates the need for outright sales of XRPs (with negative price impacts)!

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