Rialto.AI Offers New Cryptocurrency Volatility Hedging Mechanism

Rialto.AI Offers New Cryptocurrency Volatility Hedging Mechanism

One of the successes of last summers raft of ICOs, Slovenia-based Rialto.AI, announced this week that they are opening their arbitrage and market making platform to holders of their XRL token.

After raising the desired $10 million hard-cap in July, the team of data scientists, trading economists and signal processing experts have been designing the proprietary algorithms to run on the platform.

Arbitrage Provided for “Thinner Markets”

The arbitrage element will allow simultaneous purchases and sales of a cryptocurrency to profit from a difference in the prices offered on various exchanges, even when those differences are just fractions of a dollar.

This algorithm works 24/7, capitalising on any divergence, providing traders with the ability to incorporate portfolio hedging mechanisms against market volatility.

Rialto’s market making algorithm is a modification of their arbitrage strategy to make a profit on the bid/offer spread and includes sending orders out in contrast to only accepting the existing orders.

As well as providing liquidity for thinner markets, Rialto aim to exploit the ever increasing number of new gateways within the Ripple payment protocol. It is envisaged that, as the volume and number of transactions grow, and if the algorithms are successful, XRL’s profitability will likewise increase.

In order to participate, Rialto investors will need to fulfil comprehensive Know Your Customer (KYC) requirements and deposit a negligible amount of ETH to verify their Ethereum address before being granted access the platform.

The KYC registration will be handled by a team of designated account managers which is intended to eliminate some of the frustrations normally associated with the process.

Although the news of the platform release saw a temporary small rise in the price of XRL, it has succumbed to the recent overall downward market pressure and is currently trading at around $0.16.