Bitcoin Forum

A friend asked me this question about Ripple and I have no idea how to answer it or if it is even possible. Could someone with knowledge help me out. I am more into cryptos than Ripple.

How do you charge interest in Ripple? And how do you make sure that the rate cascades as the lines are drawn through the web of trust?

Thanks for any insight. :) I have no idea what he is talking about.

Charge interest as what?

If you are the gateway (people deposit whatever you represent on Ripple itself, e.g. they give you USD) you can set a "transfer fee" which is similar to the trading fees on centralized exchanges - for example 0.2% of any balance with Bitstamp are sent back to Bitstamp (you need to send 100.2 USD to make 100 USD appear at the other end). This however will only be charged once the money is moved. There might be a chance once contracts are implemented to regularly deduct interest - at the moment, something like demurrage for Freicoin is not easily possible. Especially since Ripple does not trace individual coins, like Bitcoin does.

Charging interest as customer of a gateway (e.g. you have deposited something that regularly gives interest - e.g. a stock with dividends - and want to receive parts or all of this interest in Ripple) is not built in but possible. Since every balance is public, the gateway can manually send out payments to everyone eligible whenever interest is due. You cannot "charge" the gateway for the money though (in a "pull" sense), it will be "pushed" to you from the gateway. How this happens e.g. in the stock/dividend example is up to your agreement with the gateway, they could send you USD or they could send you fractions of that stock instead.