Top Tweets for #xtales

I noticed something interesting about many memecoins on XRPL. In many cases, nearly all of their liquidity is in the form of an AMM between XRP and the memecoin. This means that if the price of XRP (say, measured in dollars) goes up, say, 5%, the price of the memecoin (again, measured in dollars) goes up 5% automatically because the AMM maintains the same exchange rate to XRP. Of course, the memcoin's price can change independently of the price of XRP. And an increase in the price of XRP leading to an increase in the price of the memecoin can trigger profit taking in the memecoin even if it doesn't trigger profit taking in XRP. But still, it means that if you hold $50 worth of a memecoin of this type, one component of the future price of the memecoin will be changes in the price of XRP. In effect, you have some exposure to the changing supply and demand for the meme and some exposure to the changing value of XRP.