XRPL Auto-Bridging The Smartest Way to Trade Assets Explained

Jake Claver

Did you know you can get the best exchange rates without even thinking about it? Dive into how auto-bridging on the XRPL revolutionizes trading by seamlessly finding the most efficient paths for every swap. No more inefficiency, just optimized trades!

Transcript

00:00Imagine trying to exchange the Turkish lira for the Mexican peso at a currency exchange.

00:05The teller says, we can do that, but not directly.

00:09We have to swap your lira for dollars first, and then dollars to pesos.

00:13Doesn't that seem inefficient?

00:14Well, here's the plot twist.

00:16You actually get a better exchange rate doing it that way.

00:19Now imagine this process happening completely automatically in milliseconds,

00:24without much effort on your part.

00:26That's what auto-bridging on the XRPL does.

00:30It's not just for fiat currencies.

00:32It's also for any asset that's issued on the decentralized exchange that's inherent to the network.

00:37Let's get into it.

00:40Auto-bridging on the XRPL is like having a super smart algorithm always hunting for the best trade execution.

00:47When you're swapping one asset for another, the system evaluates all routes,

00:51direct trading paths, and indirect ones where XRP acts as a bridge currency.

00:56Every trade on the XRPL is ranked based on quality, essentially how much you get for what you're giving.

01:04If XRP provides a better rate, the system automatically chooses it.

01:08The XRPL is an open market, with many users hosting trades for one specific currency to another.

01:15But if no one has the exact exchange you need, or enough currency to match the complete deal, auto-bridging will handle it.

01:23If you want to transfer British pounds to Euros, you would likely be able to find a direct match on the XRPL.

01:29Let's say at a rate of $1.10.

01:31But what if that isn't the best offer?

01:34The XRPL checks trading pairs and may find that it would be cheaper to transfer pounds to XRP and then XRP to Euros.

01:40In this instance, the trade rate may be $1.2 per unit, which is a better deal than you would have got if you had traded directly at the $1.10.

01:48If there's a direct trade that's a good deal, but there's not enough currency for the full trade,

01:52let's say Jane wants to trade Japanese yen for South Korean won.

01:58There is a direct market offer, but it's limited on liquidity.

02:03So she can only direct trade half of what she wants.

02:07Auto-bridging will transfer the rest of her yen into XRP before transferring it again into won to complete the other half of the trade.

02:13Instead of compromising on a worse rate or only getting half of the currency exchange, she got the best of both worlds.

02:20Auto-bridging doesn't just help traders.

02:22It strengthens the entire XRPL ecosystem.

02:26XRP's native trustless nature makes it the perfect bridge asset.

02:30XRP enables seamless, fast trading between stablecoins like USD, or they could be backed by the Euro.

02:37Auto-bridging doesn't just help traders.

02:39It strengthens the entire XRPL ecosystem.

02:42XRP's native trustless nature makes it the perfect bridge asset.

02:46XRP enables seamless trading between stablecoins like USD-backed and Euro-backed tokens, even without a direct market.

02:54The introduction of the automated market makers, or the AMMs, on the XRPL takes auto-bridging to the next level.

03:01AMM pools assets to provide consistent, constant liquidity, and auto-bridging taps into these pools to optimize the trades.

03:09This synergy stabilizes prices, deepens liquidity, and enhances the XRPL's resilience, even during volatile markets.

03:17Auto-bridging is exciting for market makers as well.

03:20Instead of managing hundreds of trading pairs, they only have to focus on maintaining a strong XRP pair.

03:27Instead of needing 190 trading pairs for 20 tokens, auto-bridging reduces that to just 20 XRP pairs.

03:34This reduces overhead and improves liquidity across the board.

03:38Looking forward, Ripple is focusing on enhancing pathfinding for trades,

03:42integrating more assets like NFTs and tokenized commodities,

03:46and growing adoption amongst institutions and developers.

03:49Looking forward, Ripple is focused on enhancing pathfinding trades,

03:54integrating more assets like NFTs and tokenized commodities,

03:57and growing adoption among institutions and developers.

04:01Ripple's USD-backed stablecoin, ROUSD, is also further cementing the XRPO as a hub for DeFi and cross-border liquidity.

04:11By connecting fragmented liquidity pools, auto-bridging ensures trades are efficient, accessible, and scalable.

04:17Auto-bridging, AMMs, and a robust infrastructure position the XRPO as an extremely interesting

04:23and useful decentralized exchange, whether you're a developer, trader, or a financial institution.

04:28Thanks for watching, please like, subscribe, and we'll see you on the next one.

Category

Transcript

Be the first to comment

Recommended