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I'm trying to better understand how buy and sell offers work on the Ripple network.
Let's say Alice creates a new Ripple currency, calls it XYZ, and describes it to her friends Bob and Carol.
Bob loves the new XYZ currency. He submits an offer to buy 1 XYZ for 3 XRP.
Carol merely likes XYZ. She offers to buy 1 XYZ for just 1 XRP.
That's the set up. I'm wondering what happens in the following cases...
What if Alice offers to sell 2 XYZ for 4 XRP? Will the ripple network transfer 1 XYZ each to Bob and Carol? Or, must Alice wait until someone offers to buy exactly the number of XYZ she is selling?
What if instead Alice offers to sell just 1 XYZ for 2 XRP? Only Bob's offer of 3 XRP meets the price. But will Bob spend just 2 XRP (what Alice asked) or 3 XRP (what he offered)?
Finally, what if Alice offers to sell just 1 XYZ for 1 XRP? Will she end up with 3 XRP from Bob, 1 XRP from Bob, or 1 XRP from Carol?
1Wow. I'm sure the answer to my question is in there somewhere. I'm trying to grok. What exactly is a "crossing offer"? Is it one that's already in the ledger when my offer is placed? – Dave Cohen – 2014-02-09T20:15:09.687
A "crossing offer" is an existing offer in the other direction that can satisfy all or part of the offer you are placing. – David Schwartz – 2014-02-09T20:15:49.323
Forgive my density. You said "...offers are always taken at the rate they were placed. Offers are always placed at their original rate, regardless of what crossing offers they take." Later, you describe a scenario in which a buy offer is consumed for a more advantageous rate, and then same for a sell offer. What am I missing here? – Dave Cohen – 2014-02-09T20:21:26.087
In those cases, the offers aren't being taken, they're being placed. They are taking existing offers, which they take at the rate at which those offers were placed. "Once they're placed, offers are always taken at the rate they were placed. – David Schwartz – 2014-02-09T20:29:14.077
OK. I think I see the light. A crossing offer is chronologically first, right? So when I ask " will Bob spend just 2 XRP (what Alice asked) or 3 XRP (what he offered)?" It is the person who offers last who gets the most advantageous rate. Please correct me if I'm wrong. And thanks for the explanations. – Dave Cohen – 2014-02-09T20:30:17.900
Correct. Crossing offers must already be on the books when your offer is placed and they affect the way your offer is placed. (If they can consume the whole offer, then no offer will be placed.) If they permit you to consume part of your offer at a more advantageous rate, then you get to do that. But once your offer is placed, it can only be taken at the placed rate. – David Schwartz – 2014-02-09T20:32:05.540