David Schwartz, the CTO of Ripple, recently conducted an Ask Me Anything session with the XRP community through TNW Answers. During the session, he spoke about Ripple’s products, especially xRapid. He also clarified questions on the transfer of value through XRP.
xRapid is one of Ripple’s three offerings that gives its users on-demand liquidity by using XRP as a bridge currency. The product is still in beta, and past announcements on the product have stated that it is set to release by the end of this year.
This has now made it a burning question on many XRP enthusiasts minds, as evidenced by user Justin Small asking Schwartz about an update on xRapid. Moreover, he also asked the CTO about the “convergence” product that was teased. Schwartz replied:
“Our goal is to have xRapid out of beta by the end of the year. We’re really excited about the recent pilot results showing 40% to 70% savings compared to what financial institutions normally pay expensive foreign exchange providers.”
However, Schwartz did not remark on the convergence of the three products, thus keeping the story in an unconfirmed state.
He was also asked about Ripple’s recent move to strengthen the xRapid ecosystem by partnering with 3 exchanges to provide liquidity. User Crypto Eri asked Schwartz about the exchanges, and how much of the XRP token is needed by each of them in order for liquidity to be achieved.
Moreover, the user also asked whether the tokens are kept on hand or regularly acquired. To this, Schwartz stated:
“For xRapid to work, there has to be sufficient liquidity between XRP and the local fiat currency to permit fiat currency to be bought and sold as needed. A lot of this liquidity is already being provided organically by market makers.”
This seems to imply that xRapid will source liquidity from a mix of both retail speculator investors and market makers. Schwartz also stated:
“xRapid will just mean that instead of (probably) trading almost exclusively with speculators, market makers will increasing trade with market takers trying to source liquidity through XRP. If needed, Ripple would consider employing third party market makers to provide additional liquidity were existing market making insufficient.”
Schwartz rewarded the title of “most technical question” asked by Dr. T, a crypto influencer. He asked Schwartz whether sourcing liquidity from multiple sources could be feasible, thus resulting in one payment.
This, according to him, will be similar to the orders being filled on the XRP Ledger’s decentralized exchange platform, requiring the construction of discrete synthetic order books for XRP/fiat data. Schwartz replied:
“I believe it is actually possible to do this with ILP, however I don’t know if anyone will ever go to the trouble of building the infrastructure necessary to do it. The philosophy of most of those working on ILP is that it makes more sense to “stream” payments in multiple directions, see which direction is giving you the best rate, and increase the payments you stream in that direction.”
Schwartz states that this method is cheap, simple, and fast, with the caveat that it is not guaranteed that the entire payment will be made. He went on to say:
“The hope is that we can design systems that fix that problem at higher levels and keep the money flow layers as simple as possible – kind of the opposite of lightning’s approach.”
Subscribe to AMBCrypto’s Newsletter