Ripple XRP has forever been better in the way they have been delivering liquidity. They have been facilitating incentives for market maker activity to improve on the XRP liquidity, eventually improving the overall performance of the ecosystem.
Sydney Ifergan, the crypto expert, tweeted: “Ripple XRP facilitates liquidity through On-demand liquidity, thus avoiding the need for pre-funding. It has gotten better. Real-time lower-cost transactions are beginning to happen as everyday reality.”
The validator ecosystem of Ripple XRP is expanding, consisting of Microsoft, CGI, BerkeleyHass, Telindus, BitGo, Tokyo, Gatehub, World link, BITSO, BAHNHOF, Flagship, and others.
XRP thus facilitates the fastest lowest cost option for sourcing liquidity in cross-border payments.
When questioned about why liquidity is necessary for market stability? Breanne Madigan, VP, Institutional Markets Ripple, stated that liquidity has a lot of components that are important to kind of address. So, one of which is immediacy. So, I think about that as how quickly can I get access to markets and how quickly can I trade into and out of this asset or token for another asset? I think about the breadth of the market. So, breath is sort of how you think about the trading volumes at different prices in the order book.
And then, depth of the market is really about how many orders there are close to exactly where the price is currently trading, of varying sizes, which would imply that you can get a lot of volume through, without having much price movement as you’re trading into and out of the asset. And then, in addition, accessibility is very important. So, accessibility is just probably, as it intuitively sounds, the ability to access markets to trade in those assets very quickly.
And that can be geographically or through multiple infrastructure partners, whether it’s exchanges or OTC desks or what have you. And, the last key attribute of a healthy liquid market is really resilience, and that is getting at the ability for a market to recover from a significant systemic event. So if there was some sort of a market shock, the ability to order books to get back to normality and tighten back to similar prices to where they were before that event relatively quickly.
Thus, Breanne Madigan opined that all of those attributes are very important to a healthy and liquid market.
A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5
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