David Schwartz Says Higher XRP Prices May Reduce Payment Slippage

Ripple CTO Emeritus David Schwartz said higher XRP prices tend to make liquidity more cost-effective and reduce slippage, a factor that can affect the cost of large transfers on the XRP Ledger.

“The higher the price, the better,” Schwartz wrote Nov. 9. “A higher price would tend to mean liquidity is more cost-effective and slippage is less.”

Slippage is the difference between the price a trader expects and the price a transaction receives when it executes. As a market mechanics explanation, a liquidity pool holding a fixed number of XRP represents more value at a higher token price. That can make large transfers less costly without adding tokens to the pool.

Schwartz said he thinks the broader market currently drives XRP’s price more than XRP-specific developments.