Ripple publishes the quarterly XRP market report to voluntarily provide transparency and regular updates of the company’s views on the state of the XRP market, including quarterly sales updates, relevant XRP-related announcements, and comments on market developments in the previous quarter.
As an XRP owner, Ripple believes that proactive communication and transparency are part of being a responsible stakeholder. Additionally, Ripple urges others in the industry to follow suit in order to build trust, encourage open communication, and raise the bar across the industry.
On-Demand Liquidity (ODL): Introduction of the credit line
Last quarter, Ripple launched Line of Credit, a new beta service on RippleNet that allows customers using on-demand liquidity (ODL) to raise capital on demand. Line of Credit allows customers to purchase Ripple’s XRP on credit, which provides upfront capital to accelerate business performance and scaling. The credit line was piloted by ODL customers and the initial feedback is mostly positive. Companies can use the capital to continue investing in their business to open up new markets and reach new customers.
In some cases, XRP is created through Ripple instead of an exchange to initiate large-scale cross-border payments. ODL will continue to evolve as Ripple continues to offer innovative financial solutions that use XRP to solve vulnerabilities for its customers.
As stated in the Q2 2020 XRP market report, Ripple is buying XRP and may continue to buy it to support healthy markets. This is a short term product solution for the line of credit beta. In the long term, Ripple is building new ODL functions to dynamically obtain XRP liquidity from the free market, not just from Ripple.
Disciplined, Responsible Stakeholders: Q3 Sales and Purchases
For the most recent quarter, total XRP revenue after purchases was $ 35.84 million ($ 35.84 million, down from $ 32.55 million in the previous quarter. Ripple focused solely on its over-the-counter (OTC) sales and leases to provide increased XRP liquidity to certain RippleNet ODL customers to enhance their ODL experience, eliminate the need for pre-financing, and eliminate instant global payments enable. Similar to the past few quarters, Ripple did not sell itself programmatically.
Total sales, minus purchases, ended the quarter at 10 basis points of the CryptoCompare TopTier volume. This is compared with the total sales of CryptoCompare TopTier in the previous quarter of 18 basis points.
|Sales overview (Dollars to millions)||Q2 2020||Q3 2020|
|Total sales related to ODL *||32.55||81.39|
|sales (minus purchases)||32.55||35.84|
|Global XRP volume||Q2 2020||Q3 2020|
|ADV XRP (Dollars to millions)||196.28||403.58|
|Total XRP volume (Dollars in billions) **||17.86||37.13|
|Net sales in% of total volume||0.18%||0.10%|
* ODL-related sales include XRP sales in support of ODL (including line of credit) and key infrastructure partners
** Note: Numbers were generated using the CryptoCompare API for TopTier Daily Aggregate Volumes, which reflect total XRP volume in US dollars by exchanges that CryptoCompare is listing in TopTier at the end of the third quarter. Ripple continues to evaluate its benchmarks in the face of challenges such as false volume that persist in the industry.
Certain wallets used for XRP sales also offer short term leases to market makers. This is worth mentioning insofar as this is often characterized as revenue by market participants. Leases will ultimately be returned to Ripple.
The daily volume reported by CCTT for XRP increased in the third quarter of 2020 compared to the second quarter of 2020. The average daily volume was $ 403.58 million in the third quarter compared to $ 196.28 million in the second quarter.
The standard deviation of XRP’s daily returns from the third quarter was 3.5%, representing an increase in volatility of 3.0% in the second quarter and 6.2% in the first quarter. XRP’s volatility was higher than that of BTC (3.2%) and ETH (3.3%) for the quarter.
In the third quarter of 2020, three billion XRPs were released from escrow (one billion per month). A total of 2.4 billion XRP were returned in the quarter and then incorporated into new trust agreements. Further information on the fiduciary process can be found here. Note: All numbers are based on transactions that occurred during the quarter.
XRP integrations and liquidity updates
The XRP infrastructure was further developed in the last quarter. FTX integrated the XRP / USD spot listing and accepted XRP as collateral for all derivatives. Among the top crypto exchanges, FTX now holds the largest market share of XRP Open Interest.
Data source 03/10/2020 06:00 AM UTC
Other notable product launches include:
- Binance has launched the XRP-secured inverse perpetual swap XRP / USD. Binance launched XRP put, call and straddle options (long only) as well as lever tokens XRP up and XRP down in its app.
- Flare announced the launch of a smart contract platform for XRP through a “utility fork” that would allow Spark (their token) to be claimed by certain existing XRP holders. This is positive for the XRP community as developers can create smart contracts for new use cases like loans and derivatives, expanding the usefulness of XRP.
Liquidity and volume
In terms of total liquidity and volume, XRP ended the quarter as the fourth largest digital asset, climbing from 5th place in the last quarter.
XRP: A preferred base currency for arbitrage trading
With XRP, traders can take advantage of time-limited arbitrage opportunities that they would otherwise not have with other digital assets. The speed, low transaction costs, and reliability of XRP are ideal for a currency that allows market makers and traders to capture more price differences between exchanges. It also reduces the risk to the various risks associated with these arbitrage trades.
By using XRP as a bridge currency between trading venues, for example, traders can significantly reduce the time required for this and, above all, the associated volatility risk compared to other digital assets such as BTC and ETH. This is shown in the graphic below of a transfer of assets over $ 10,000 in BTC, ETH and XRP from Binance to Coinbase.
Data source 03/10/2020 06:00 AM UTC
In fact, the transfer time between exchanges for XRP across a selection of major exchanges can be up to 18 seconds (Bitstamp to HitBTC) when the payout times for the exchange are the lowest.
Data source 03/10/2020 06:00 AM UTC (source exchange on the left / target exchange above)
XRP Ledger Foundation
The XRP Ledger Foundation, an independent, non-profit organization, was established to support the development and introduction of the decentralized XRP Ledger. Ripple, along with Coil and Gatehub, made an initial donation to support the work of the foundation and help the growing developer community that is building on the XRP ledger. The foundation’s vision is to accelerate the development of a healthy XRP ledger ecosystem that includes the involvement of developers, public and private companies, and social initiatives geared towards financial inclusion and sustainability.
As the world transitions into a clean energy future, sustainability has emerged as a global priority across all industries to drive future economic growth – global finance is no exception. In fact, the NYDFS released an open letter to the NY NY Supervised Financial Institutions on Climate Change last week highlighting the potential environmental impact of cryptocurrency mining, particularly the high energy consumption from mining BTC.
Ripple has partnered with leading technology and conservation organizations like the Energy Web Foundation and the XRPL Foundation to ensure that all blockchains can become carbon neutral – starting with the XRP ledger.
XRP is inherently extremely energy efficient. Transactions are processed without the huge energy costs associated with the proof-of-work mining required for other blockchain-based transactions. In fact, for every million transactions, BTC consumes 4.51 billion light bulb hours compared to XRP, which is 79,000 light bulb hours. This means that the energy consumption of XRP is 57,000x more efficient than that of BTC.
Finally, with the release of XRP Ledger v1.6, new features and improvements were introduced such as: B. a more robust consensus mechanism and the negative UNL change to devnet to test reliability, stability, performance and security.
Crypto as an inflation hedge
As central banks began printing fiat currencies and federal governments hit record levels of fiscal stimulus, inflation concerns have gripped financial markets. Fears of dollar devaluation began to drive the market tale, leading to 18-month lows in DXY and record highs in gold and silver. As investors looked for ways to preserve their fortune in supply goods, money naturally poured into the crypto markets, bringing BTC above the 12,000 mark for the first time in nearly a year.
Continuation of the institutional adoption
Institutional demand has grown over the past year, and the third quarter was no exception. Financial giants like Standard Chartered Ventures announced a pilot of a custody solution, and Fidelity is doubling its commitment to space with the launch of a BTC fund. In particular, grayscale BTC trust has seen colossal growth, now controlling 2.4% of all BTC in circulation. MicroStrategy, a NASDAQ-listed technology company, announced the purchase of over $ 425 million in BTC in the quarter, marking the entry of public companies into crypto investments.
Rise of decentralized financing
DeFi dominated in July and August 2020, with the total trapped value in the room skyrocketing from $ 2 billion to $ 11 billion and posting record volumes. This hype led to a self-reinforcing buying cycle, even for foodie-inspired tokens like sushi, hotdog and yam. Digital assets with a market capitalization of less than $ 500 million were at the top of the volume rankings on centralized exchanges and consistently outperformed the top 10 large-cap assets. The hype cycle finally peaked in September and the DeFi bubble deflated (did not burst), causing most assets in space to track back up to 60% from their highs.