David Schwartz, the Chief Technology Officer at Ripple, has unveiled a fresh AI-powered trading bot. This advanced concept adheres to an algorithm from XRP Ledger AMM and is designed to have the same functionality. The primary design feature of this bot is its capability to act effectively and reliably on centralized exchange markets. Schwartz performed preliminary testing there, primarily focusing on Solana trading.

The initial phase of the application’s development left David Schwartz with a solid conclusion that “it’s really rough now.” In this regard, he opined that the GitLab link was needed since this would enable the public to review the code. This gesture suggests a future where the community could contribute to refining the bot’s capabilities.

David Schwartz Tests Trading Bot for Solana

As for profitability, Schwartz does not distort himself by foreseeing either profit or loss. He gives an estimated yield value of 11% per year of funds from trading bot. Schwartz points out that it is too early to propose that the chatbot’s reliability in making significant profits can be accepted with the highest degree of certainty. The bot’s inability to respond to small price gains and its inadvertent delay are among the important points observed by David Schwartz. Additionally, the impact of trading fees presents a notable challenge to its overall performance.

The tax regime related to the bot’s operation during the short-term also has some resemblance with the long-term short gains, in the opinion of David Schwartz. The competition between the bot’s engine and the algorithms of the XRP Ledger AMM is currently undecided. Basically, the techniques used by the market watchers to test inventory size causes this. Schwartz’s exploration into trading bots comes without prior experience using decentralized AMMs, marking a new venture for the Ripple executive.

XRPL AMM Innovation Leverages Asset Volatility

David Schwartz also shed light on the potential for creating Automated Market Makers on the XRP Ledger with any two supported assets. He anticipates that AMMs featuring XRP will dominate in popularity. This prediction is based on the algorithm’s design, which favors volatility harvesting. Such a mechanism is most effective when at least one of the involved assets exhibits significant volatility.

The focus on XRP as a primary asset in these AMMs is strategic. It leverages the currency’s volatility to maximize the effectiveness of the algorithm. As the development of this trading bot progresses, its alignment with the principles of the XRP Ledger’s AMM could pave the way for new trading strategies within centralized exchanges.

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Filed under: News - @ January 1, 1970 12:00 am