- Ripple’s David Schwartz develops a trading bot based on the still rudimentary XRP Ledger AMM algorithm.
- The bot, tested at Solana, shows Ripple’s commitment to innovation in cryptocurrency trading.
David Schwartz, Ripple’s Chief Technology Officer, has developed a new trading bot that promises to bring novelty to the world of cryptocurrencies, specifically to the XRP ecosystem. Using an algorithm similar to the XRP Ledger’s Automated Market Makers (AMM), this project still in its infancy, already raises several considerations for Ripple and cryptocurrency enthusiasts in general.
This bot, currently in a rudimentary stage in Schwartz’s words, is a sign of Ripple’s ongoing effort to lead cryptocurrency trading. Schwartz has experimented with this bot in Solana trading and is considering sharing the code through GitLab, reflecting an open collaboration and improvement approach with the community.
After ~2 years, the day has finally arrived – the AMM is live on XRPL mainnet! Thus begins a longer road from today’s initial rollout to future growth milestones for users, traders, devs, market makers and many more. Looking forward to the journey alongside all of you in the XRPL… https://t.co/JZjxloxo06
— David "JoelKatz" Schwartz (@JoelKatz) March 22, 2024
The profitability of the bot is still an unknown, with Schwartz projecting a possible return of 11% per year. This cautious forecast evidences the uncertainties of the crypto market and challenges such as trading fees and the bot’s limited ability to take advantage of small price movements. Such factors are critical when assessing the long-term value of the bot as an investment tool.
In tax terms, gains realized through the bot would be treated as short-term capital gains, meaning that tax implications could dampen the attractiveness of the gains.
The ability to create AMMs with any asset pair in the XRP Ledger expands the scope of these tools within the XRP network. Schwartz has indicated a predilection for AMMs that include XRP, arguing that the volatility of one of the assets can be beneficial, suggesting an increase in XRP liquidity and trading activity.
Schwartz’s initiative not only promises to improve available trading tools, but also to boost XRPusage and adoption by encouraging the creation of AMMs in the XRP Ledger. However, the success of this project will depend on how technical and market challenges are overcome, as well as the receptiveness of the investor and trading community.
