To understand the $589 figure, one must first understand the category of transaction it is designed to accommodate. Also, the $589 XRP calculation starts with the assumption that the XRP Ledger achieves delivery-versus-payment adoption at a layer comparable to the Depository Trust & Clearing Corporation (DTCC) and Continuous Linked Settlement (CLS).
There are many corridors that fall under these transactions, and this model breaks it into six corridors. DTCC net settlement is assigned about $15 trillion at 20% capture; SWIFT cross-border settlement is assigned about $21 trillion at 14% capture and FX derivatives net settlement is assigned about $12 trillion at 12% capture.
The Square Root Market Impact Model Produces $589 XRPThe $589 figure comes from an inverted version of the square root market impact law. The model uses a $2 billion ticket size, $73 trillion in annual volume, 0.5% volatility, 5 basis points of slippage tolerance, 1.36% turnover, and a 25 billion XRP liquid float.
