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Good question! It will definitely depend on what “smart contracts” mean in this situation and what RippleX is aiming for. Will we see just another automation marketed as smart contracts, or will we see hooks (WASM-based) integrated directly into the mainchain or MoveVM, any other VM or even EVM? No matter what, the moment a VM is added on layer-1 to enable smart contracts, a developer theoretically has the ability to launch their own siloed AMM platform or lending platform or whatever. This means that the Super DEX that sits on layer 1 of the protocol (consensus layer) would have new competition. As with all things, this will be both beneficial and unfavorable in some ways. I think we should wait for the XLS proposal first to learn more about what RippleX actually plans to propose to the community.

@Krippenreiter Thank you very much for the detailed response.

Him Tim, ich mache keinen Deutschen Content, sorry! 🥲 Ich kann dir nur die Deutschen Untertitel anbieten, die ich immer mit hinzufüge bei jedem Video.

Der Aufwand wär viel zu groß, für gefühlt 5 Leute Deutschen XRPL-Content zu machen.

It is generally believed that a bull run is near and that the price of (all?) cryptos will go up and that XRP may go up even more than other cryptos - so the answer is _zero pools_ Ripple needs liquidity for their products to be attractive, so I will not be surprised if Ripple puts a lot of XRP+RLUSD in a pool. Even if from an investment point of view this would not be ideal.

@@mhkoo1 Correct. To offset the IL that the bullrun would create, the fees collected by the pool throughout this time frame would have to be massive (steady >40% APY or even more), yet they are not. Golden rule #10 prevails.

@@Krippenreiter what is your opinion about Ripple needing liquidity for their products to be attractive? I will not be surprised if Ripple puts a lot of XRP+RLUSD in a pool.

@@mhkoo1 Personally, I believe Ripple's goal is to transition away from TradFi market makers and toward DeFi liquidity. They are going to have expenses regardless, but the XRPL-DEX offers the chance to boost the XRPL at the same time. 👍 Yes. I wouldn't be shocked if a lot of XRP (from escrow?) and RLUSD (which they also hold) make their way into the pool. Because they could double-side deposit large amounts, they will not really destabilize the pool-asset ratio, which is good for existing liquidity providers. 👍

Your videos are the best in the global crypto world. Thanks! After this video it sounds like for a strong XRP believer, that there is not one AMM pool on the XRP ledger that could support all your criterias, if you trust that XRP has a tremendous price appreciation in the emerging bullrun. But my experience the last four months was that the AMM price discrepancy in times of XRP price appreciation will level out after a few days/weeks and there is no more impermanent loss, just like you explained in your last IL video! Or did I misunderstood something?

This is exactly what the next video will be about. 😀

The whole "unhosted.exchange" website also exists as so called "xApp". Think of it like an app from a playstore that you could use. It will work the same way and can be found inside the Xumm/Xaman-mobile app. This way no computer is needed and all you really need is your phone and the Xaman-wallet 😀

Haha, no. 😀 I am just an average dude, no CTO or any special person you probably know. 😀

The benefit for retail is to "level the playing field." Even if it sounds corny, I know, the idea is that anyone can now be a market maker, and you could also build a startup tomorrow and make your issued token liquid very fast and with ease. For investors, it can work out in a way that allows for passive income since otherwise there are no protocol-based incentives to hold XRP. In regards to the mechanics of constant product AMMs, the X * Y = K formula actually doesn't allow any side to become fully empty since the other side of the pair becomes indefinitely expensive or inexpensive based on your point of view. If you visualize the quantity in a graph, it becomes more obvious since the line on the graph comes very close to the X/Y axes but never touches it. On XRPL, for example, the way to empty an AMM pool is to let everyone exchange their LP-tokens back against the assets in the pool until it becomes empty.

@@Krippenreiter does " the X * Y = K formula actually doesn't allow any side to become fully empty" mean that the AMM does not sell more than 81% of XRP in the pool (graph at 12:30) ? I understand that AMM in a stable market with small fluctuations generates income for investors. But does retail understand all other scenarios, e.g. that in a bull run the AMM sells XRP (maybe performance comparable with a dollar cost average sell) ? I would love to see a simulation where we can compare AMM and non-AMM: a) when then price of XRP goes up 200% in 30 days, b) goes up 500% in 10 days, c) goes up 500% in 10 days and then drops 50% in 3 days.

@@mhkoo1 That's the wrong graph. 😅 The graph at 12:30 was only about impermanent loss. There are diagrams available on google if you dive more into the math, but the basic idea is that no side will ever sell more than 99.9999999999...% and so on... Logically, as the asset quantity approaches zero but never equals zero, the value has to be indefinitely high in comparison to the other. (This hardly happens in practice.) You are correct, dollar cost average selling is the perfect description in a bull market, which is why you should never invest in an AMM-pool if you believe a moonshot is near and prices will never return to their previous levels. (I will make this very clear in my next video about the friends and enemies of an AMM) There are some simple calculators out there that may help with the simulation, but overall, every price change equals an impermanent loss. If fees collected by the AMM aren't enough to counter the loss, then all these heavy price changes will end up in a loss.

Thanks! I'm not sure exactly for the next part if I want to directly jump into the XRPL specifics or stay with the fundamentals for now. Hmmm 🤔

Dear Ralf, I am sooo grateful to hear that. 😇Yes, pictures make it easy to learn and understand the math concepts and explanations. Most people are visual learners, which I want to reach with these drawings. 😀

Without Single-Asset-Tokenized-Vaults (0065 XLS - 65d), there is currently no way to stake XRP or any other asset on the XRPL. Besides that the XRPL is no Proof of Stake chain and has no protocol-based incentives.

@@Krippenreiter thank you

Greetings back 😉 Thanks for the sub 😇

Thanks mcm! 😀 That's all i hoped to hear. Willingness is the first step. The rest will follow 🙏

I bet you are very kluk yourself 😁

@@Krippenreiter das ist ein BINGO 🥹🤓

Glad it helped. 😇 The most important concept to understand with AMMs is impermanent loss. If you understood this, you are well ahead of the majority of people I know that invest in DeFi ecosystems. 😬

That's because I purposefully left out fees to avoid complicating the matter. The impermanent loss section's main goal was to illustrate why IL exists in the first place and how it can be calculated using simple math. So in this situation, I intentionally let Paul lose to demonstrate what IL is.

@@Krippenreiter now to figure out how to prevent it

​@@drmilton1302 The only way to “prevent” IL is to not withdraw your assets from the pool until the price has returned to the exact value at which you originally invested in the pool (see chart at the end of the video / 0% price change = 0% IL). That being said, impermanent loss is practically unavoidable due to the formula and arbitrageurs trading the pool. You can fight it and try to offset or mitigate it through fees and other mechanisms, but true prevention is impossible at the moment.

Waiting for regulations and pairing USDC/RLUSD. That's about as stable (coin) as it gets.

@@drmilton1302 The issue is that without volatility, you will not earn much because the constant product formula was not designed for stablecoin pairings. 😅 USDC is also not currently issued by Circle on the XRPL, but rather by GateHub, so be sure you understand what you're doing. 🤐 Nevertheless, good luck! 🙏

Du bist viel zu schnell gewesen! 😜

@@Krippenreiter soll ichs löschen?😅

@@freddythefly Ne alles schick! Aber du bekommst ne Bonusfrage 😬 Der Preis war bei 4 XRP nach dem Trade ja bei 1.5625 RLUSD für 1 XRP. Um von 1 XRP = 1 RLUSD auf 1.5625 zu kommen, musste ein Trader 1.25 RLUSD hinlegen. Wieviel RLUSD müsste ein Trader hinlegen, um von 1.5625 (nach dem ersten Trade) auf 2.7777 (Nach dem zweiten Trade) zu kommen?

@@Krippenreiter mach ich morgen, muss früh raus🚶🚶😀

​@@Krippenreiter2,0833 RLUSD🔥

give us the answer :D

@@nofacex3122 Here you go 😜 Number of RLUSD tokens on the right-hand side: 25 / 3 = 8.333... RLUSD tokens Price for 1 XRP AFTER the trade: 8.333... RLUSD / 3 (Because there are 3 XRP coins) = 2.777... RLUSD Implied price for 1 XRP BEFORE the trade (i.e. the price that the trader actually had to pay): 8.333... - 6.25 RLUSD (The RLUSD that were previously in the pool) = 2.08333... RLUSD So to get from 1.5625 RLUSD for 1 XRP to the final price of 2.777... RLUSD AFTER the trade, the trader did not have to put 1.5625 RLUSD in the bucket to take out 1 XRP, but rather 2.08333... RLUSD.

Dito! 😇 Thanks Jungle! 😀

Thank you for taking the time to watch it 🤗