Dealing with rumors is a difficult challenge for PR teams, but denying rumors that are true creates a challenge for the long term.
In mid-September 2021, it was reported that Ripple Labs was looking to build a market making platform.
A person with knowledge of the matter allegedly told Coindesk that Ripple was recruiting as many as ten people, including a crypto trader with experience with arbitrage between different exchanges and a marketing executive tasked with building relationships with liquidity providers and exchanges.
Ripple was also found to be recruiting an institutional markets analyst. The job posting mentioned Ripple’s “vision of an internet of value requires digital asset efficiency and a healthy crypto market, and robust liquidity is a core component of making that vision a reality.”
A Ripple spokesperson denied the report that the firm had plans for a market-making platform.
Nearly two months later, the blockchain specialist and creator of XRP announced the upcoming launch of Ripple Liquidity Hub.
The platform will initially support BTC, ETH, LTC, ETC, BCH, and XRP. In the future, Ripple plans to add functionality such as staking and yield generating functionalities.
According to the announcement, the technology is the same that has been supporting Ripple’s On-Demand Liquidity (ODL) product for nearly two years, but will be made available as a customer-facing product.
This means Ripple will be providing aggregated access to cryptocurrency market makers, exchanges, and OTC desks to enterprises, with the first announced partner for the alpha version being Coinme: a licensed bitcoin ATM company in the United States, with thousands of locations across the country.
The turnkey solution for financial institutions is expected to help accelerate the shift to crypto will leverage smart order routing to source digital assets at optimized prices from market makers, exchanges, and OTC desks.
Enterprises can use Ripple Liquidity Hub to provide their end customers with the ability to buy, sell and hold digital assets at the best possible prices across a range of venues.
The firm also wants to solve specific pain points of enterprise customers such as avoiding long and resource-heavy integrations through a streamlined API, and eliminating pre-funding requirements in order to free up working capital.
The definition of market making platform and liquidity hub may not always coincide, but it seems that Ripple simply chose to deny the rumor back in September to avoid scrutiny over a project that is still in a very early stage.
Denying rumors that are mostly true, however, may backfire. Especially for companies within the digital asset ecosystem, a space that faces extreme volatility on a daily basis.
The market making platform rumor was denied and forgotten. Then, Ripple announced its liquidity hub and all is fine. The problem is that the next rumor will be taken more seriously precisely because this last one was true and denied.
This only shows the importance of a solid communications team and how it can affect a company in the long term. We hope Ripple has learned its lesson.