Ripple CTO David Schwartz has recently taken to Twitter to explain the company's XRP prefunding strategy in more detail. This prefunding strategy allows customers to fund just one account and send payments to any On-Demand Liquidity (ODL) destination markets. Ripple's system is highly flexible as customers can hold their funds in their preferred asset and pay in another. This reduces the need for multiple pre-funded accounts. It also allows customers to shift responsibility to Ripple by prefunding their accounts with XRP at very near zero cost, ultimately taking on some credit risk. Schwartz admitted that the company does face a small non-zero risk that the customer will not pay back the XRP if their funds are held in a bank that fails. However, in this case, the company charges a fee to cover the credit risk.



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