August 2017 AMA Session Answered
Q1: During arbitrage operation, will profits be compounded as additional leverage for RIALTO.AI trading or are they pooled away for future distribution only?
Yes, any increase in the asset pool is reinvested until the point of distribution. It is important to notice that the need for reinvestment is based on the market situation and it will be used only once a full utilization of existing asset pool is reached. We expect not to exceed the 50% utilization of the Digital Asset Pool in the next three months. Further utilization will be mostly dependant on the exchanges and gateways that will pass our background check. We will not connect market making platform to exchanges or gateways where the integrity of the assets could be easily compromised. At the time of writing, two cryptocurrency exchanges and one Ripple gateway have passed the background check and are to be connected to the trading algorithms.
Q2: One question a lot of people are dying to know: which exchanges are you in talks with?
We assume this question is related to the listing of the XRL token and not to exchanges used for trading. XRL token is currently listed on Livecoin and EtherDelta. Bittrex did not accept the listing proposal for XRL. We are in early talks with Binance but with no tangible agreement yet.
Q3: I spoke with a hedge fund manager about RIALTO.AI future prospects and this was his response: “As a story I could see RIALTO.AI getting legs, but don’t like it as a business model. About to be commoditized. I’ve had daily calls with their competitors. A big hedge fund will do the same, but keep all the profits.” Question from RIALTO.AI token holders: how will RIALTO.AI outcompete?
We are aware that we are the first movers and currently one of the largest market makers on the market. New competitors will be entering the market on the ongoing basis, especially as the industry develops further. At the moment software architecture and robustness of the crypto exchanges and gateways are at a very low level and do not yet enable professional and automated market making or arbitrage solutions as are existent in financial systems. For example, the responsiveness of the systems is at such level, where the language in which algorithms are written, does not play any role in terms of competitive advantage. We are closely following the development of exchanges to be in step with the latest technical solutions. We are confident that we will be able to compete on the long term with the knowledge and the team that we have.
The current competitive advantage is the team’s experience in AI, the knowledge on which exchanges and gateways have certain shortcomings and how to optimize the trading accordingly. At the moment, there is a lack of market makers in the market, but with a double digit number of new exchanges and gateways in the pipeline, the need for market makers will increase.
A strategy, that we will pursue as the first mover, is an aggressive approach to trading on minor exchanges where we will be able to make the significant share of the total volume and where we could afford to be more aggressive in terms of closing trades with minimal margins in order to make a potential entry less attractive for other competitors.
Q4: Are there any regulation issues with the SEC regarding your concept?
At the moment, RIALTO.AI has no issue with any regulatory body.
Q5: Are you confident that you can negotiate lower trading fees with exchanges because you’re bringing a great deal of liquidity into the markets?
Yes, we believe this will be possible for the majority of exchanges. Some are offering custom fee arrangements for market makers by default, with others we have to negotiate on the individual basis.
Q6: What will happen to RIALTO.AI’s arbitrage strategy given the impending threat and advent of protocols like 0x (ZRX) and Kyber Network?
We are welcoming the announcements of aforementioned and similar projects, even though the majority is still in early stage. We see this as one segment of blockchain and cryptocurrency transaction processing system. Each segment has a different level of differentiations, among others: fiat transactions, different user end applications, and local market differentiations. For example, the financial institutions that are looking to enter the industry have different goals for their solutions as potential users of a decentralized exchange. We do not believe that one segment will take over the market share of the entire system. There is a need for connectivity between segments and that is why we believe that also the need for market making between participants will still exist in the foreseeable future.
Q7: Will RIALTO.AI be providing any sort of financial statements, performance updates to its token-holders? It would be nice to predict dividend payouts and will greatly mitigate the chances of pump and dump schemes while keeping the price of the token stable (or growing at a healthy rate)
The trade statistics will be accessible for registered token holders (registration will be possible in the second half of the September). This will enable monitoring of past performance and the extrapolation of data for performance predictions. We will also publish quarterly reports on the trading, operations, and other activities. It is in our interest to provide the most accurate data and guidance possible in order for the value of XRL token to resemble the intrinsic value.
Q8: If you had to ballpark it, how much do you expect the first dividend to payout, and the second. Maybe a range?
Trade statistics will be accessible to registered token holders which will enable the projections of the performance range. We will not publish any official guidance on the predicted performance of the trading system. Performance is closely tied to the number of exchanges and gateways connected to the system. We will start with those that passed the background check, which are currently two exchanges and a Ripple gateway. We are testing another two exchanges on which the evaluation will be finished in October.
Q9: How far along is the artitrage bot/trade bot? When will we see this being used?
The bot is in use and optimization is being applied constantly. Trading data will be accessible to registered token holders. To actually see it in use, please visit us at the Blockchain Solutions Forum in Barcelona.
Q10: You mentioned that RIALTO.AI will eventually be in a unique position to create an exchange with the cheapest ‘world rates. Will this fall under the same company with 100% of the profits being distributed to token holders? Or would that be a seperate ICO / project?
RIALTO.AI is one existing project. The feature with the ability to purchase or sell tokens through RIALTO.AI user interface is planned for September 2018.
RIALTO.AI September Session is active. We invite you to submit and upvote questions you would like to get answered here: https://www.reddit.com/r/RialtoAI/comments/6y8rky/rialtoai_ama_september_2017/