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/biz/ - Business & Finance

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57514024 No.57514024 [Reply] [Original]

Can anyone explain how the system profits from it? I understand that you can provide liquidity with your tokens and earn some money. However, if XRP's price goes up, you're losing money because you locked in at a lower price. If the price goes down, you're losing money too. So, what's the big fuss about? How can an AMM increase the XRP price? And what's the point of locking your XRP at 50 cents, then missing out on all gains if they beat the SEC? I need some 150 IQ opinion.

>> No.57514225
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57514225

>>57514024
XRP's AMM is different in that it uses a continuous auction mechanism (where arbitrageurs bid for the right to participate in the market making) to determine the price of an asset rather than an oracle. LP tokens are burnt on the arbitrageurs side in order to trade which results in a higher proportional share of LP tokens on the liquidity providers side, so they are entitled to more of the profits from the pool in relation to a conventional AMM, this offsets IL by about 50%

>> No.57514267

>>57514225
You could also choose to LP between two correlated assets to almost eliminate IL (say XLM gets tokenized on XRP) they have a beta of 0.78 between the two so you will make almost pure profit from the LP depending on the volume.

>> No.57514950
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57514950

XLM also has had an AMM since forever and look where that shitcoin is. kek.

face it, you XRP fags are NEVER going to profit or even reach old ATH lmao

>> No.57516152

>>57514024
AMM decreases sell pressure but you are correct, positive price action will ruin your gains. That’s why I’m telling anons to calm down and wait post AMM, just hold on the way down because it will also pay you for holding on the way down, but up or will steal from you.

>> No.57518206

>>57514024
AMM means exchanges don't get to Jew small % away from every transaction because people can buy directly from the AMM. (Will cause growth because more money will get into the coin that would go to exchanges otherwise)

>> No.57518667

>>57514950
this

crippletards will hype up any old shit that has been around for ages just because their precious little shitcoin decided to finally catch up. And as per the usual it will turn out to be yet another total nothingburger. But guess what? They will just latch onto another meme date/happening and keep hyping that up until all is blue. Rinse and repeat. Meanwhile years go by.