Ripple’s XRP Omitted from the Morgan Creek Digital Asset Index Fund
Among some of the other notable cryptocurrencies, Ripple’s XRP has been omitted from the Morgan Creek Digital Asset Index Fund which has been launched recently.
Even though XRP is a prominent cryptocurrency, institutional investment vehicles often end up overlooking it because of the uncertainty concerning the nature of the cryptocurrency—as in whether it is a security token or not.
Stellar Lumens (XLM) and XRP have been completely omitted out from the list of the cryptocurrencies to be managed by the new index fund which had been launched today. XLM and XRP share quite a lot of commonalities—especially the fact that both of them use pre-mined tokens.
For those of you unfamiliar with the word pre-mined, it refers to a situation wherein the cryptocurrency’s total token supply is produced right at the onset of its blockchain.
Speaking about the exclusion of XRP, XLM, and many other pre-mined cryptocurrencies from the index fund, Anthony Pompliano, a partner of Morgan Creek said:
“If there’s a central party that owns 30% or more of supply, then we withhold those from the index. Because we think that introduces a lot of additional risks that may not be there if it was a more decentralized network.”
A lot of controversies surround XRP. Due to its apparent centralized nature, people question whether it constitutes a security or not. The executives of Ripple say that even though they own a majority of XRP tokens, the cryptocurrency is as decentralized as it could be.
Morgan Creek is now one of the major institutional focused crypto investment vehicles which have maintained distance from the cryptocurrency. The fund currently boasts 1.5 billion USD worth of assets under management (AUM).
As per the details which have been released so far, the institutional investors are provided access to Bitcoin (BTC), Ethereum (ETH), and eight other popular cryptocurrency tokens with the help of the fund. The fund is a rules-based index fund which is being managed by Bitwise Asset Management, a company which signed a partnership agreement with the company earlier this year. As far as the progress made so far, the company has been pretty positive. Pompliano said:
“We’re fully prepared and feel we’ve built something that institutional investors will find attractive regardless of how the assets are categorized. Whether they’re securities or not.”
The platform is indeed pretty attractive with many important cryptocurrencies to be traded on it. It is highly likely for the platform to grow further in the right direction in the future.
Ripple has a knack for being in the news. Recently, Brad Garlinghouse, the CEO of Ripple went on an AMA with Cory Johnson, the Chief Marketing Strategist of Ripple. A few days before the AMA, the live session of David Schwartz at The Next Web made it big in the news. He answered many questions in the live session, with the questions and answers going something like:
Dr. T: Will it ever be technically feasible to source liquidity from multiple pools (like two or more exchanges) and recombine them into a single atomic payment that’s settled at a destination exchange?
I’m thinking along the lines of something similar to incremental filling of orders on XRP Ledger decentralized exchange that consumes offers from multiple sources. In the RippleNet case, it would mean constructing synthetic order books that have offers from XRP/Fiat pair from multiple exchanges.
I understand that this might not be possible with ILP but perhaps some other solution?
David: Congratulations on asking the most technical question today! I believe it is actually possible to do this with ILP, however I don’t know if anyone will ever go to the trouble of building the infrastructure necessary to do it. The philosophy of most of those working on ILP is that it makes more sense to “stream” payments in multiple directions, see which direction is giving you the best rate, and increase the payments you stream in that direction. This is cheap, fast, efficient, and simple to implement, however, it doesn’t guarantee that you will be able to make the entire payment. The hope is that we can design systems that fix that problem at higher levels and keep the money flow layers as simple as possible — kind of the opposite of lightning’s approach.