From our analysis, the ratio of profit to the risk involved in investing in the platform is high enough (the ratio upon investment)Market Cap -> By using this to find how stable and valuable XRP is during the last 5 years, it appears that the value went up a fair amount and has a potential soonRealized Market Cap -> Proved that the coin sustained its value during lower price levels, and took immediate action with the market movementDaily Transaction Count -> With this metric, we will be able to know how healthy and valuable the blockchain, so for the users they can realize how valuable the coin is.Active Addresses Count -> It shows us how active the active the platform is and whether it’s still relevant or not, with these metric users can predict the behavior of the coin by reading the general trend of the addresses, with either slow gradual increase that’s followed by a gradual increase of the coin, or a surge spike in addresses that’s followed by a dip in the price etc...· Make sure that you examine associations among metrics (that is, their correlations) along with the (raw) dataWe noticed a decrease in market cap and hence price and circulating supply decreased too, and we think it is probably due to the lawsuit filed against XRP by SEC (US - Security and Commission Exchange) according to https://cointelegraph.com/cryptocurrency-regulation-for-beginners/the-sec-vs-ripple-lawsuit-everything-you-need-to-know, the lawsuit has been acting as a “deadlock” on XRP and its community.The huge spike in active addresses during the period of 2020 and 2022 can be explained by the increase of interest of cryptocurrencies during COVID, so new investors joined the platform which let to spikes in active addresses and the performance of XRP during that time was relatively good and ended up being a good investment.· Propose a new metric along its measure, reason, possible interpretationNumber of new accounts, it measured by summing newly opened accounts, possible interpretation is that newly addresses might indicate a new up in XRP prices." title="[Newbie] Need feedback on a college report studying Ripple/XRP">full image - Repost: [Newbie] Need feedback on a college report studying Ripple/XRP (from Reddit.com, [Newbie] Need feedback on a college report studying Ripple/XRP)
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Hey everyone, this is our teams work analyzing on chain data of Ripple/XRP as part of a university project. All your suggestions, discrimination, and general thoughts are welcome.Executive SummaryThis is report is a detail analysis of our chosen platform named XRP, where we defined XRP, what makes it so special, named and explained our favorite metrics, how do correlate to our platform to better understand XRP and foresee the next possible price for XRP to encourage people to invest in this project more. We found the metrices that we thought can produce tangible results, and correlated with XRP, explain the behavior of the platform and its users by using the metrics and their interpretation, while listing our critical results such as that the ratio of profit to risk involved, and some recommendations for decision makers, finally we related some real time events to explain certain interpretations. The next step for our analysis to be completed is to validate our results by going to online forums and communities and getting feedback on our analysis and results.Platform and Case Scope· Explain which platform is chosen and why?The platform we have chosen for this project is XRP, which is crypto currency for Ripple, with the last being a money transfer network that was created to meet the demands of the financial services sector, hosted on the XRP Ledger, and according to market capitalization, it frequently ranks in the top ten. On why we chose this platform is because we realized that XRP unlike other cryptocurrencies, focuses on making an alternative fast banking system with very little transaction fees, so comparing to other cryptocurrencies, XRP seems to have a very beneficial goal that many people can benefit from, they have made some successful smart contracts with other corporations and countries like Saudi Arabia, Egypt, in which they established a successful money transfer network which made it easier for people to transfer money with little gas fees since these countries have very restricted and fee demanding banking system, and that what intrigued us to analyze XRP more and encourage more people to invest.· What is the governance of the model behind this platform?A global developer community governs the decentralized, open blockchain known as the XRP Ledger (XRPL). It is quick, efficient with energy, and dependable.The consensus process used by XRPL requires that specific servers known as validators agree on the sequence and conclusion of XRP transactions every three to five seconds.Each transaction is processed uniformly across all servers in the network, and any transaction that complies with the protocol is immediately confirmed. Strong cryptography is used to protect the system's integrity while ensuring that all transactions are transparent.Anyone can run a validator, and there are presently over 150 of them online on the ledger being used by institutions of higher learning, exchanges, companies, and private individuals. The consensus protocol also makes sure that as the validator pool expands, the blockchain becomes more decentralized.· What will we achieve with BCA for the chosen platform or application?We want to find successful metrics that can make us better understand XRP’s performance for the public to be more encouraged to invest in XRP since it has a good cause a big potential to replace to traditional banking system.Data and Analytics Scope· Show and explain the analytics process as architecture, model (that is, all the analytics works from raw data extraction to the analytics results)The team began by reading up on the project and gathering information from the sources listed below. Each team member then selected metrics that they felt were relevant for the goals of the project we had selected (XRP), and by using analytical techniques like finding correlations and monitoring changes in some metrics, we came to our conclusions. As an example, when examining market capitalization and due to the way, it is calculated, we discovered a direct correlation between the price of XRP, thus we chose to include it in our analytics since it is also frequently used to rank projects.· Determine analytics tools that will be used:Coin Metrics (Metrics & Data)Trading View (Ideas & public feedback)Crypto Watch (Articles)Meta On-Chain AnalyticsMetrics NameDescriptionMeasuresInterpretationRelations with Other Metrics and ReasonsMarket Cap.The sum USD value of the current supply.Multiplying the total number of coins that have been mined by the price of a single coin at any given timeFormulation of this metric diverges from other sources who discount coins held in escrow or treasuries.Related to Circulating supply because of the way they are calculated, and they are proportional to one anotherRealized Market Cap.The sum USD value based on the USD closing price on the day that a native unit last transacted for all native unitsThe sum of each (unspent transaction output) * last movement priceRealized cap is best understood as a metric which captures the average cost basis of all current holders. It has been used to devise popular oscillators and derivative metrics.Free Float CapThe sum USD value of the current free float supply. Also referred to as free float market capitalizationTaking the equity's price and multiplying it by the number of shares readily available in the marketHigher free float indicates that investors are rapidly selling and purchasing the coin because selling and buying will less likely affect the price of the coin30-day volatility, A larger free float means that the stock's volatility was lower because there are more traders buying and selling the currency30-day volatilityThe rate at which the price of XRP increases or decreases over a 30-day period.Standard deviation and Maximum drawdownThe more volatile an asset is, the riskier it's considered to be as an investmentROI (Return of Investment), Higher currency price volatility often helps investors to estimate the fluctuations that may happen in the future – increasing the profit30-day Active SupplyEach unit of XRP supply is classified by the time at which it was last active, for Ripple, escrows are considered active supply, with a last active time at the time of their creation.The sum of unique XRP units that transacted at least once in the trailing 30 days up to that interval (Native units that transacted more than once are only counted once)This metric tracks the fraction of active supplies in the specified 30 days period, since it counts the sum of unique XRP units, it’s made it harder to be forged or played with by whales with copious self-sendsActive Addresses CountEither a destination addresses or source of ledger change, it’s sum count of unique addresses that were active in the network.It's the sum of active addresses no matter what activity it does (sending or receiving), if it’s active it’s counted.An address is considered active as soon as it becomes a direct participant in a successful transaction (either as a sender or a receiver). Hence, active addresses serve as a good indicator of daily users over any blockchainDaily Transactions is tied directly with Active addresses, with more daily transactions that happens, it means there is more active addressesDaily Transaction CountThe daily total sum count of transactions. Transactions represent the intended actions that were initiated by a user (human or machine).The sum of every XRP transaction. Every officially signed transaction has a unique "hash" that can be identified. The server adds the hash as a reply when the transaction is executed. Server counts these hushes and sums it all daily.Because it is the sum of all transactions, it is very important for the AI when mapping the target audience and making a guess about approximately how many transactions will affect the market.Active Addresses Count The more active addresses on the chain the more transactions the chain can perform at a given time deltaROI (Return of Investment)The return of investment for the asset that was assumed to be purchased selected amount of days earlier. In other words, it is the profit value of an asset if it was purchased a certain time ago.XRP Price ratio of USD divided by the same ratio but from a prior time. Time stamp can be selected according to how the metrics will be used. (Monthly or daily)The profit may determine the amount of new transactions that will be executed by users. For other users’ profits can attract new users. The last ROI metric data might determine how the market will be affected.Open InterestOpen Interest looks at the number of contracts being traded in the market at a given point in timeThe calculation is arrived at by adding the total number of open trade positions and subtracting the total number of trades.This metric is important because it's a broad indication of capital inflows into markets. As more money comes in, the amount of open interest rises, and vice versa.On-Balance Volume (OBV)The On-Balance Volume indicator is one of the earliest tools for determining positive and negative volume flow.The volume flow (value of OBV) is calculated by adding volume on up days and subtracting volume on down days to create a running total representing the amount of purchasing and selling pressure.On-Balance Volume is important cause investors they see differences in volume and price as a reflection of the interaction between “smart money” and the dispersed masses to highlight opportunities for purchasing in opposition to unfavorable current trendsSupply active – 1 yearEach XRP supply unit is classified according to the time it has been active for 1 year.Activity in an open account often generates income for the provider.The scope of services and incentives provided by brokers is aimed at propagating active trading accountsCirculating supplyCirculating Supply refers to the number of coins or tokens of a specific cryptocurrency that are publicly available to buy or sell.Market capitalization = circulating supply x asset’s market priceCirculating supply can be used to determine a cryptocurrency’s market capitalization (MCAP) by multiplying the current market price by the number of coins or tokens in circulation.ResultsFinding IDObservationsMetrics/MeasuresAny Chart ReferencesInterpretationRecommendations to Decision Makers1Market cap is used as an indicator of the dominance and popularity of cryptocurrenciesMarket Cap.Figure 1The market cap of a cryptocurrency reflects the popularity of a coin over a longer term.Broad view of the project2Market cap increases along with ROIMarket Cap.Large-cap cryptocurrencies are generally considered to be safe crypto investments. (XRP, BTC, and Cardano), small-cap cryptocurrencies are considered a highly risky investment.Safe Investment3Realized Market is proportional to XRP and stays stable in local lows, and hikes up the price whenever it peaksRealized Market CapFigure 1When its low, it’s an indicator of stable XRP coin price in general with no sudden price dips over the course of one to 3 years, indicating a close incoming spikeLong term investment7Free Float Cap is proportional to USD denominated closing priceFree Float CapFigure 2Lower free float means lower trading volume which results on lower priceTentative8Free-floating shares of a cryptocurrency is inversely correlated to volatilityFree Float CapFigure 2In low free floating, Fewer trades move the price significantly and there is a limited amount of coin shares available to be bought and/or soldTentative9xFree Float CapXXX10Volatility increases, ROI increases30 days VolatilityXHigher currency price volatility often helps investors to estimate the fluctuations that may happen in the future – increasing the profitHigh-risk Short-term investment11Volatility and price are inversely correlated30 days VolatilityXHigher volatility means more risk, more risk means investors not willing to pay muchHigh-risk Short-term investment12Increase in Volatility is often followed by increase in 30-day active supply30 days VolatilityXHigher volatility leads to higher demand which in return increases active supplyHigh-risk Short-term investment13The time the active supply peaks, XRP reached new Hight’s, but after that it fluctuated30-day Active SupplyFigure 3The active supply affects the trend of the prices, but it’s not completely in sync, with each time reaching new low numbers even though active supply isn't at its lowestBuy at the positive trend but sell as soon as the price plunges14X30-day Active SupplyXXX15X30-day Active SupplyXXX16The soaring number of active addresses came after hike of XRP price, but the addresses didn’t peak at that timeActive Addresses CountFigure 4When XRP started decreasing after the peak, the number of addresses increased due the new attention brought by the hike of pricesSell if the addresses increased too fast17From time to time, a slow increase of addresses triggers a gradual increase in XRP pricesActive Addresses CountFigure 4Fast address increase can only indicate a fast trend of new addresses that are looking to sell as soon as possible, and a gradual increase often indicates a gradual increase in XRP pricesBuy if you notice a slow and gradual increase in addresses18Sometimes the active addresses form these spikes showcasing a weird trend of sellers that can last for months but the price would remain stableActive Addresses CountFigure 5Unless there is a gradual increase in addresses, mountain spikes are not indicators to look forward to, it’s either the coin will stay stable, or it will go through a fluctuating increase and decrease in pricesDon’t buy nor sell in this phase19When ROI is lower the transfer count is higher due to potential lossROIxWhen users lose money due to price changes, they sell their assets to cut their losses and retrieve from the marketTentative20Also, when the ROI is high the transfer count and market fluctuation is higher due to profitROIxROI can only be high when people make profit. So, if the profit is visible more people will affect the market by buying assets.Tentative21ROI will determine the approximate direction of transactions (sell or buy)ROIxMost likely extreme heights and lows will both mean there will be more users selling their assetsSell if high and keep assets if low to stake another opportunity to stay in the market22The more transactions the more fluctuation in the marketDaily Transaction CountxMore users make transactions, market will be affected accordinglyAct on the price if the count is higher than usual23When a significant price change happens the transfer counts will likely be higherDaily Transaction CountxIf the prices go up or down drastically, an action is probably will be efficientSell if the price is high and keep or buy if it is low, for the market price will be affected once more when transactions occur24Small change in price will have higher effect on the market if the transaction counts are higherDaily Transaction CountxEven if the price does not change dramatically the high transfer counts will cause the effects to enlargeIf there is an incline on transfer counts, consider the price changes more important and act accordingly25XRP futures open interest reaches $1.2 billion recordOpen InterestEven XRP is a new currency it reaches high open interest records.TentativeThe upward trend will likely continue when price and OBV make higher peaksOn-Balance Volume (OBV)In higher trend OBV will be higher. So, we can find more peaks than normalShort Term Investment26During some trading ranges, the OBV fell before making a breakout.On-Balance Volume (OBV)We think this is an indicator for short term investors in the platform.Short Term InvestmentWhen XRP OBV raised, accumulation occurred frequently during a trading range, creating a warning of an upward breakout.On-Balance Volume (OBV)It is important for the platform to have frequent accumulationsShort Term Investment27Massive Disconnected between OBV and price of XRP.On-Balance Volume (OBV)People are buying XRP, but they are generally in accumulation phase.Long Term Investment2829The circulating supply is 50,343,500,506 XRP coins and is maxed out.Circulating supplyxWhen the amount of supply in circulation is added from the total supply, the value of the cryptocurrency may decrease.High- riskDiscussions and Conclusions· List most critical 5 results for the selected metrics and discuss them briefly (one paragraph for each of them) from decision makers, platform owner and/or user perspectives.Volatility -> From our analysis, the ratio of profit to the risk involved in investing in the platform is high enough (the ratio upon investment)Market Cap -> By using this to find how stable and valuable XRP is during the last 5 years, it appears that the value went up a fair amount and has a potential soonRealized Market Cap -> Proved that the coin sustained its value during lower price levels, and took immediate action with the market movementDaily Transaction Count -> With this metric, we will be able to know how healthy and valuable the blockchain, so for the users they can realize how valuable the coin is.Active Addresses Count -> It shows us how active the active the platform is and whether it’s still relevant or not, with these metric users can predict the behavior of the coin by reading the general trend of the addresses, with either slow gradual increase that’s followed by a gradual increase of the coin, or a surge spike in addresses that’s followed by a dip in the price etc...· Make sure that you examine associations among metrics (that is, their correlations) along with the (raw) dataWe noticed a decrease in market cap and hence price and circulating supply decreased too, and we think it is probably due to the lawsuit filed against XRP by SEC (US - Security and Commission Exchange) according to https://ift.tt/vf4kIwP, the lawsuit has been acting as a “deadlock” on XRP and its community.The huge spike in active addresses during the period of 2020 and 2022 can be explained by the increase of interest of cryptocurrencies during COVID, so new investors joined the platform which let to spikes in active addresses and the performance of XRP during that time was relatively good and ended up being a good investment.· Propose a new metric along its measure, reason, possible interpretationNumber of new accounts, it measured by summing newly opened accounts, possible interpretation is that newly addresses might indicate a new up in XRP prices.
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