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There is actually a really interesting dynamic to this option contract. Ripple Labs owns a large amount of Ripples. They own enough to tank the market price and
by dangero 9y ago
There is actually a really interesting dynamic to this option contract. Ripple Labs owns a large amount of Ripples. They own enough to tank the market price and make this contract irrelevant. I'm sure they don't want to do that for other reasons, but the existence of this options contract means they didn't anticipate the price to go up this fast so now they are torn between a)forcing the price down b)accepting this option contract and paying it c)trying to back out of it
- wmf 9y agoIt's not clear that Ripple Labs is any worse off honoring the option now than they were; in either case it's a fixed fraction of their holdings. Edit: Let me explain this again. Let's say the option was exercised last year; Ripple Labs would be out XRP that is now worth ~$1B. Now let's imagine that the option is exercised right now; Ripple Labs would be out ~$1B of XRP. It's the same thing.
- dangero 9y agohttps://www.coingecko.com/en/price_charts/ripple/usd https://www.coingecko.com/en/price_charts/ripple/usd The Ripples are worth more now. A lot more.
- zdkl 9y agoYou're focusing on the wrong thing so let me explain again as well... It's not about the beancounters realising the option is way bad for the issuer, it's management getting cold feet about signing off on 5% and mispricing future trades.