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Ripple : Question on Market Makers profit scheme

Ripple update: Question on Market Makers profit scheme


How do market makers profit off of providing liquidity for banks and FI?

I read one article where some of them will use arbitrage. But I assume that their main profit would be expected to come simply from selling XRP for slightly more than they are buying it for. But I am worried not much opportunity to make money there, because:

1) High competition with other market makers will mean very high liquidity on both sides (buy/sell), and thus very small difference between buy and sell prices (small profit percentage)

2) Exchange fees

I am wondering if for #2, there will be exchanges with even lower fees than Binance, for example, where XRP can be traded? Don’t some DEX have no fees while trading? Even then though, i am worried the profit percentage would come down to simply the lowest possible denomination of the exchange.

I think this is an important question to ask, because it is what will be useful in determining the price valuation for the XRP token, since only market makers are likely to actually hold XRP – banks and FI will simply use it for transfers, buying and selling the same amount, meaning they will not affect the price of the token themselves.




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About Ripple (XRP)



Ripple connects banks, payment providers and digital asset exchanges via RippleNet to provide one frictionless experience to send money globally. Banks and payment providers can use the digital asset XRP to further reduce their costs and access new markets. XRP is the fastest and most scalable digital asset today.

Author: mekane84

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