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“XLS30D: Unleashing the Power of AMM Liquidity Pools on the XRP Ledger”
September 25, 2023
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Dear fellow XRP Community members,

Are you excited to embark on a revolutionary journey that’s set to propel the XRP community on a revolutionary leap forward? Brace yourselves, because we are heading into the deep end the introduction of Automated Market Maker (AMM) pools on the XRP Ledger is nothing short of a game-changer. Ripple’s CTO and XRP Ledger Co-Creator had this vision for over a decade, and now, it’s finally here! In this blog post, we’ll explore the significance of AMM pools and how they will transform the XRP ecosystem. So, XRP enthusiasts, let’s embark on this exciting journey together!

In an insightful paper “Steps towards an ecology of money infrastructures: materiality and cultures of Ripple” by Ludovico Rella

The Genesis of AMM Pools:

Imagine a scenario where the perennial challenge of liquidity, often likened to the “chicken and egg” paradox, is ingeniously and brilliantly solved. XRPL AMM pools are set to deepen liquidity across numerous tokenized Fiat Stablecoins, and blue chip crypto pairings to XRP.

What sets XRPL’s XLS30D AMM Liquidity Pools apart is their innovative approach to maximize the revenue potential earned by Liquidity Providers, which is accomplished in two ways:

David Schwartz has said Harvesting of Volatility for Yield.” In this twitter thread below 👇 he sheds some light on that how that’s related to the “Continuous Auction Mechanism.” David is actually responding to my tweet in twitter thread explaining the continuous auction mechanism to someone and he flat out says there are “TWO things going on.” 🤯

Besides earning from FEES generated by AMM from traders swapping, XLS30D AMM offers Liquidity Providers TWO uniquely novel ways to earn additional revenue, is “Harvesting of Volatility for Yield”

  1. “Continuous Auction Mechanism” — which winning bid from Arbitrageurs pay with LP tokens and they are destroyed but the underlying 2 assets they are a claim on are redistributed to all the other Liquidity Providers LP tokens. The quantity of XRP and the other asset in the pool remains unchanged, the 2 assets underlying the burned LP tokens were redistributed proportionally to all LP tokens.
  2. “Harvesting Volatility for Yield” — The AMM enacts a trading strategy that earns a spread from orders it offers on the DEX orderbook. This is where XRP’s ultra low txn fees and blazing fast 3–5sec settlement really shine ✨ Over a long duration the AMM continues to capture small amounts in a spread over and over and this VALUE CAPTURED is actually added to the AMM Pools total value. The AMM Pools policy is designed so that it will never accept offers that decrease the total value of the pool, only that keeps it the same or increases the value. As volume increases and/or volatility increases these profits the AMM earns from its “Trading Strategy” are amplified. This is only possible because of the Trio of technologies that all working in unison and the XLS30D AMM’s have been designed to always enforce the policy in its code.

Software automatically reads from AMM’s bonding curve and employs the Fibonnaci sequence to provide orders on CLOB using LP capital from AMM Pool. We should expect to hear more about this in near future from David Schwartz and RippleX Devs. It was only very recently that I was able confirm that this is a separate action from the continuous auction mechanism. This actually adds value to the pool by earning that spread. This is the beauty of having this trio of technologies operating together like a symphony at the PROTOCOL LAYER.

It’s important to note that the “Continous Auction Mechanism” and “Harvesting Volatility for Yield” will BOTH be amplified in times of high volatility, which is defined as large horizontal movements within a price range or channel.

Liquidity providers’ earnings persist within the pool, continually compounding in real-time.

When XRP or any crypto is paired with fiat and experiences increased volatility, it almost invariably accompanies a surge in global market trading volume for that asset. Consequently, this results in higher fees earned by the Automated Market Maker (AMM). These fees come from trades and payments between the two assets in the pool. Continuous Auction Mechanism auctions off 24hrs of No trading fees in its AMM Pool. Winning arbitrageur of auction has the LP tokens they bid to win, redistributed proportionally to all liquidity providers.

The AMM capitalizes on this volatility by harvesting yield through executing synthetic offers as part of its “Trading Strategy” on the DEX order book. Impermanent loss is a concern for many crypto owners, but the XLS30D specification offers three ways to earn yield for liquidity providers, specifically designed to maximize yields during periods of high volatility.

It’s a well-known fact that cryptocurrencies don’t follow a linear upward trajectory. This also means that depositing liquidity in XRP alone as a single asset within a USD/XRP Pool can reduce exposure to downside volatility by nearly 50%. The AMM takes care of this by automatically swapping half of the value of the XRP deposited into the other asset in the pool. For instance, in an XRP/USD pool, half of the deposited XRP will be automatically swapped to USD, and you’ll only incur the fee percentage rate of that particular AMM Pool on the 50% of value you initially deposited in XRP.

“This reduction in exposure to downside volatility, combined with a continuous and steady yield flow, will significantly enhance XRP’s allure for institutional investors and long-term XRP holders.”

LP Tokens — Yield-Bearing Premium Collateral

In the world of XRP Community, discussions about Automated Market Makers (AMMs) often miss a crucial point. When you become a liquidity provider, you’re essentially staking the pool, and in return, you receive LP tokens. These tokens represent your ownership share of the assets in the pool. Each pool has its unique LP tokens, and various apps will show you the percentage of the pool that your LP tokens signify. It’s vital to note that these LP tokens are independent of the issuer of the other asset in the pool.

XRP is a WEALTH MACHINE

XRP Ledgers huge benefits for XRP Institutional DeFi #AMM🚀

XRPL Private CBDC XRPL networks allow for the ability to bring together market participants to support testing of institutional DeFi Applications using CBDC’s And stablecoins.

They are full throttle ahead building a Top Down Institutional DeFi ecosystem with multiple acquisitions and partners building in coordination, all the necessary modular components necessary to support the inevitable TSUNAMI 🌊 OF INSTITUTIONAL VALUE that will pour in from fiat to this new on-ledger token based financial ecosystem.

Equipped with multiple secret weapons and aligned incentives of market participants to expand the Primary Liquidity Market in a sustainable manner that evolves into the ultimate value exchange and liquidity system that is simply going to be unmatched.

The AMM’s powerful architecture is designed to maximize Liquidity providers yields in revolutionary ways. XRP will be an investable asset that doesn’t sacrifice its utility but instead amplifies it to drive a consistent DEMAND for XRP in Liquidity Pools. Increasing transactional demand and spinning the liquidity flywheel to record speeds. PRISMA will provide the continuous volume that demands a level of liquidity and if it drops then yields shoot up attracting new investors and with so much interest in finding ALPHA from Wall Street, XRPL AMM Pools is built on a foundation of providing a service that utilizes XRP’s Utility as LIQUIDITY. Forget overnight flip switch, price sets, gold backed, and buy backs, all are waste of time and honestly any seasoned investor would rather be on the first train of the WEALTH MACHINE and hold the asset you believe in and add on a continuous stream of yield that will amplify in times of volatility.

The Unique XRP Ledger Guarantee

Consider the example of the XRP/USD Pool on the XRP Ledger. Here, liquidity providers receive LP Tokens that represent their proportional ownership of the pool’s assets based on their deposits. What makes this different from other AMMs is that, instead of being issued by a Dapp smart contract, the XRP Ledger itself guarantees that you can redeem these LP tokens at any time for the current value of a 50:50 XRP/USD pair. You can withdraw to XRP directly without even setting up a trustline to the issuer of the other asset paired with XRP in the pool. However, it’s essential to understand that you are indirectly exposed to 50% of the issued USD in the pool while you hold the LP token.

Stablecoin Issuers and the Future of XRP/USD Pools

As the Amendment passes an 80% Governance vote by XRPL validators and the Node community for two weeks, we can anticipate the creation of multiple XRP/USD pools on the mainnet XRP Ledger. Stablecoin issuers also have the option to add a transfer fee to the stablecoins they issue, allowing them to earn additional revenue with each transfer. Furthermore, with increasing regulatory clarity, especially in the United States, we can expect easier on/off ramps for fiat stablecoins directly from bank accounts and other digital wallets that connect to traditional fiat payment systems.

The XRP Ledger was intentionally designed to support Financial Institutions (FI’s), Banks, Exchanges, Custodians, and even Central Banks in issuing tokenized assets onto the XRP Ledger. These assets can represent off-chain assets such as fiat currencies, physical commodities, real estate, securities, and more. The trustlines combined with the clawback amendment provide essential security guarantees, ensuring that only XRPL accounts with authorized trustlines can access the pool for both single and two-asset withdrawals.

XRP Ledger’s protocols trio of technologies:

AMM,Central Limit Order Book (CLOB) DEX, and the Payment Execution Engine. These elements form a seamless and network of liquidity on the XRP Ledger, giving XRP its Primary Liquidity Market. The “OG DEX” as David Schwartz has referred to it. Broader crypto community has overlooked the XRPL DEX for many years but they are in for a surprise they never saw coming when this trio of programmable technologies are fully integrated with each other after AMM proposal XLS30D is officially passed governance vote by validator and Node community

XRP Unique Offering:

Unlike other cryptocurrencies that rely on “secondary market liquidity,” XRP boasts a Primary Liquidity Market powered by its native protocols, offering programmability like no other. The native DEX central limit order-book by itself was not able to provide the deep pools of liquidity to match secondary market liquidity on CEX’s. With the upcoming addition of the groundbreaking XLS30D unique AMM implementation has novel features that generate multiple streams of continuous compounding yield. This will undoubtedly attract liquidity providers to deposit XRP and a variety of other assets into the pool, as well as fiat Stablecoin issuers and arbitragers. This creates a powerful sustainable foundation of unified liquidity that aligns all the interests of the market participants.

Then the real fireworks will begin when Ripple’s intelligent Liquidity Aggregator, PRISMA is able to intelligently route ODL volume through the XRPL DEX and AMM pools. Considering ODL is designed to use XRP as a bridge asset to instantly settle international fiat cross border FX payments, there needs to be deep pools of organic sustainable liquidity that’s not dependent fragmented liquidity from speculative trading on 600 global crypto exchanges. That global fragmentation of liquidity has meant Ripple has had to subsidize liquidity in certain corridors by paying incentives to professional market makers. PRISMA’s Implementation in 2020/2021 to power ODL and Liquidity Hub, has had a significant impact on expanding ODL into 45+ corridors, reducing reliance on Ripple to payout incentives to market makers. But it’s still dependent on speculative crypto trading volume and is never going to be able to scale to the levels liquidity necessary for XRP to reach its full potential. Many people in XRP Community tend to over focus on only XRP the digital asset and completely overlook the fact that its native network the XRP Ledger was purpose built to be a global distributed exchange powered by its protocols, a sophisticated payment execution engine that allows for multi pathfinding and and cross currency autobridging and the worlds first ever DEX aka Decentralized Exchange with a an automated matching trading engine that works in unison with the payment execution engine. The Ledger itself was designed to facilitate payments and trades between multiple fiat currencies, cryptocurrencies and other assets like gold or securities that were issued onto the XRP Ledger.

The integration of AMM Liquidity Pools is the single biggest enhancement to the XRP Ledger, its brilliant design provides XRP the digital asset with the native economic model it has sorely been lacking the past decade. With its underlying programmable protocols that give it intrinsic value as a global value exchange, primary market liquidity for XRP, and a multi asset payment execution engine.

I will be covering primary market liquidity, XRPL AMM LP Tokens, and deeper dive into a real valuation framework for XRP based off its demand to be staked in the AMM pools as its predominant driver for demand of XRP. Keep a lookout for this in an upcoming YouTube video and blog post in this series.

The Power of the Payment Execution Engine:

XRP’s payment execution engine is a marvel, with programmable payment capabilities that can navigate complex trading paths. It always seeks the best path, utilizing both order-book “offers” and AMM pools, a feature unmatched by other networks.

Ripple recently released a white paper 📄 on XRPL Payment Execution Subsystem

Who Can Participate in AMM Pools:

• The XLS30D AMM Spec is designed to attract a diverse range of participants, from financial institutions to hedge funds, corporates, crypto VC’s, DAOs, and even retail investors. Anyone on the planet can deposit XRP into AMM pools, and the possibilities are endless.

Growing the Pie:

 AMM pools may contain a pair of any two assets issued natively on the XRPL or bridged over from another network. Although the AMM is fully decentralized in that no single entity has any additional administrative powers than any other entity, if an AMM pool contains a centralized issued asset like a Fiat stablecoin, then that issuer requires trustlines and likely KYC/AML verification for someone to swap into or hold that asset in their account. Providing liquidity in the other asset, say it be XRP, is not required to have any direct exposure to issuer. Yet it’s still a centralized issuer issuing one of the two assets. Also note that even the creator of the AMM pool has no authority over AMM pool, they cannot blocked anyone from providing liquidity to the pool in the other asset but anyone trading into or out of the asset they issued will need to have an authorization from them which is what makes the trustlines such a powerful assistant to regulatory compliance for issuers. Proposed clawback amendment will extend their ability to have more fine grained control over the asset they issued but it still has NO control or authority over single deposit liability providers of the other asset in the pool, nor their LP tokens. LP tokens trustlines go to the special root account at are set at zero. Meaning there’s no credit or debit relationship. Only that LP token is guaranteed to redeem its ownership share of assets in the pool. A single asset withdraw is possible.

There will be pools that have 2 decentralized assets that. neither asset has a centralized issuer. For example, this would include native XRP, a XRP-collateralized stablecoins and assets bridged from the Flare Network through a trustless gateway. With XLS38D Side Chain amendment set to be proposed on the heels of XLS30D AMM, which will open up the floodgate for for EVM based chains native assets and ERC20's, ERC721 NFT’s via the purpose built EVM side chain. Which is a collaborative between RippleX snd Peersyst. It is currently live on DevNet with a two-way EVM-XRPL bridge. David Schwartz has been adamant about the need to bridge over blue-chip crypto assets like BTC, ETH, LTC, SOL, ADA, and DOT in a DECENTRALIZED manner that they can then seamlessly be integrated into AMM pool paired to XRP. Broadening liquidity for payment execution engine to draw down multiple XRP paired pools and orders on CLOB to achieve the best price.

This is the beauty of having a unified liquidity system, it’s as true to being a “primary market” as possible. This is something that cannot be replicated in its entirety, it provides a unique advantage in competing to be the dominant asset for global liquidity in the future tokenized world. The message has always been consistent from Ripple and David Schwartz, it’s the positioning of XRP and enhancing its native distributed exchange and payment execution engine. Placing XRP in an advantageous position to capture additional liquidity in the “Long Tail,” if an asset is liquid to XRP then it’s liquid to any other asset liquid to XRP. No public crypto asset will be chosen by central banks or agreed upon by global banks to be the next global reserve currency. Instead, in a world where the INTERNET of Value allows for the seamless transfer of value between any two assets or currencies in the same way information is transferred today. The rise of a dominant asset for global liquidity will happen organically by natural market forces of a capitalist society.

The Economic Model:

With the addition of AMM pools, liquidity on the XRP Ledger will be unified. These pools are designed to generate fees, profit from arbitrage opportunities, and harvest volatility for yield. This unique model helps mitigate impermanent loss and reduces the impact of downside volatility on XRP.

Unveiling the Power of Continuous Yield:

In the dynamic realm of XRP, we stand on the cusp of a profound shift in perspective. Instead of fixating solely on short-term capital appreciation, it’s time for the XRP Community to embrace a new era of understanding — one that delves into the intricacies of how XLS30D AMM Pools orchestrate the generation of yield through the strategic deployment of XRP as liquidity. This is no ordinary feat; it’s a novel design that transcends the realm of conventional Uniswap DEX forks. It’s a protocol ingeniously woven into the very fabric of the network layer, seamlessly intertwining a value exchange DEX order book with a sophisticated payment execution engine.

What sets this apart?

It’s the achievement of UNIFIED LIQUIDITY across the entire network, a rare gem in the crypto universe.

This gem is destined to shine even brighter, thanks to the organic and consistent demand for liquidity generated by RippleNet’s ODL and Liquidity Hub Volume, artfully channeling transactions through the AMM Pools, orchestrated by PRISMA. Unlike the often gimmicky liquidity mining rewards and artificial yield incentives meant to compensate for impermanent loss, high gas fees, and the extractable value on platforms like Uniswap V2 and others, XRPL AMM Liquidity Pools emerge as nothing less than a WEALTH MACHINE.

The magic lies in the multitude of ways to earn yield beyond just FEES. There’s no upper limit; the ecosystem can flourish when high volumes yield high rates compounded daily. And then there’s the LP token, a super-premium collateral that assures liquidity providers that their assets in the pool are forever redeemable, regardless of market fluctuations. Their composition may have changed since depositing, but the LP token offers an unwavering guarantee.

Now, you might wonder about calculating potential APY percentages. As AMM’s come to life post-validator vote amendments, we can anticipate comprehensive documentation and an array of community projects sprouting forth. These will equip liquidity providers with tools and resources to estimate earnings based on various metrics and market conditions.

Depositing liquidity in AMM’s on XRPL is a leap into a world without counterparties, without permissions. It’s an entryway into the realm of native compounding yield, paid through Fees accrued from asset swaps within the pool. Every XRP owner can join this venture, utilizing non-custodial wallets to infuse XRP liquidity into any AMM pool featuring XRP as one of the two assets. Brace yourselves for the burgeoning DeFi ecosystem around AMM Pools, offering XRP holders conservative options and opportunities, starting with DeFi Protocols like lending and borrowing seamlessly integrated with XRPL AMM’s.

In the world of XRP, its Decentralized Exchange (DEX) is the beating heart at the center of the XRP Ledger (XRPL) — pumping fast,ow-cost and expansive LIQUIDITY throughput the network.

Typically “Volatility” (large horizontal price movements within a channel” are considered a negative for XRP’s quick settlement speed makes liquidity the key factor. AMM pools transform asset volatility into a revenue stream, increasing the pool’s value by leveraging LP’s assets.

Liquidity provisioning is not merely participation; it’s a service that enhances network liquidity, facilitating programmable offers, cross-currency pathfinding, and instant settlement. AMM Pools and DEX aren’t mere add-ons; they’re intrinsic components of the network, unlike Ethereum’s complex smart contract DApps. The rewards? A continuous stream of yield, compounding daily, amplified during bouts of high volatility and heightened volume, tempered when the markets calm.

Now, imagine this: depositing XRP into an XRP/USD pool significantly reduces downside volatility risk. You accumulate more XRP, and half of your value in the pool is spread evenly between the two assets. This is a game-changer, especially for institutions. They’ll experience far less exposure to XRP’s inherent volatility while reaping the rewards of daily compounding yield, accentuated during tumultuous market phases. They also receive an LP token, XRPL LP tokens are issued at the protocol layer by the Ledger itself, unlike the spaghetti web of different Liquid Staked ETH tokens that are issued at Application Layer and by Dapps, DAO’s and even Centralized Exchanges. For anyone unaware, this is the single biggest growth area in all crypto and has recently exceeded previous highs set during 2021 bull run. The power of composable yield bearing asset has potential to be used in a wide range of DeFi Dapps and protocols in a growing Borrowing /Lending, Derivatives, Options, Yield Farming, stablecoin creation and many more.

The DeFi ecosystem is the most advanced on Ethereum mainnet. ETH staking combined with the “Merge” are part of ETH economic model as more than a gas token but an “internet bond” is what it is being pitch as to institutional investors. After the merge roughly $300-$500 million is burned in ETH every month, which is extracted from the users of the network, paying exorbitant fees, with a small percentage, going to award the validator’s and delegators which is 4 to 5% APY. We need to keep a close eye on the impacts of this economic model cause this is significant deflationary pressure that Innoway is artificially being generated at the expense of uses of the network which won’t be sustainable.

Where is on the XRP LEDGER a AMM, Liquidity and Pools are designed with novel features that align incentives of all the participants of the ecosystem to drive sustainable demand for a XRP as Liquidity in the AMM Pools as more Pools are spun up and volume in thanks to RippleNet’s ODL and Liquidity Huh which are under a major effort to be integrated to the XRPL DEX CLOB, AMM, and payment execution engine, which all operate in perfect unison based on mathematical policy at the protocol later.

An LP token can be a hybrid stablecoin if the liquidity provider deposited/staked liquidity into a XRP/USD AMM Pool. This XRP/USD LP token can be used in multitude of ways but the 3 simplest strategies are:

⚠️ WARNING ⚠️ THIS IS *NOT* FINANCIAL ADVICE and is for educational purposes only. I am only trying to demonstrate the different opinions that wil be available for different users

  1. Borrow XRP against your LP token to maintain nearly the same amount of XRP you originally had before depositing the XRP single deposit into pool. This in of itself removes impermanent loss. Since the LP token is comprised of 50:50 XRP/USD this minimizes the chance of liquidation by nearly 50% which is huge. Also, keep in mind you can lower your collateral ratio at any time.
  2. A single deposit USD from an institution may want to limit their exposure to XRP downside volatility as much as possible, by borrowing XRP against against LP token collateral and immediately selling the XRP provides short exposure to XRP Price. There’s a number of other ways to hedge upside and downside volatility using Options and perpetual futures that are maturing in DeFi and have gained significant traction (DyDX, GMX)
  3. You can leverage your Yield Earnings by 3–5X by borrowing the same two assets secured by the LP token as collateral.

Interestingly, the leveraged Yield position creates a market for conservative XRP and stablecoin owners to lend their XRP without any exposure to the AMM Liquidity pools. They can simply lend XRP or Fiat stablecoins and earn the interest the leveraged yield farmer pays in interest. Best of all they always guaranteed to get back the assets that they want because they are guaranteed by the Ledger itself. This is called secured lending and will be very appealing to many XRP owners. Interestingly, their assets do end up contributing equality to the AMM. They just are not exposed to the AMM pool or any impermanent loss.

This is the beauty of implementing at the Protocol Layer, because it increases safety and reduces risk for users of applications that typically have much higher risk and lower safety.

This transformation is monumental, and XRP is poised to become one of the world’s most enticing investments. It can be seamlessly deposited as liquidity, subsequently tokenized into a hybrid, semi-decentralized yield-bearing super-premium collateral asset. This asset offers lower volatility than holding traditional cryptocurrencies, making XRP an irresistible investment opportunity. Its utility as liquidity will soon be accessible to ALL, from retail to institutional investors, once the amendment passes.

💦 LIQUIDITY’ is the LIFEBLOOD🩸 of the “ INTERNET of VALUE”

 

Ripple’s Expanding Role:

  • Ripple is not stopping at AMM pools; they will are building powerful infrastructure for data analytics used by machine learning and AI. RippleNet is evolving into an application layer network, supported by PRISMA, the intelligent Liquidity Aggregator system, which interacts seamlessly with different blockchains and exchanges.

XRP Ledger was designed and built as a public permission-less blockchain that is readily accessible retail and help enhance compliance for Enterprises. An Application Platform for everyone:

RippleNet is evolving beyond being an enterprise payment network. It’s becoming an application platform that supports additional utility for XRP as liquidity. The ultimate goal is to channel all liquidity and volume onto the XRP Ledger, creating a primary market and an economic model for XRP. This is not speculation but fact, David Schwartz has confirmed in recent Twitter spaces that “THERE’S A MAJOR EFFORT UNDERWAY TO INTEGRATE ODL INTO THE XRP LEDGER DEX/AMM’s"

In conclusion, the introduction of AMM pools on the XRP Ledger is a monumental milestone. It unifies liquidity, provides continuous yield, and positions XRP as a leader in the world of digital assets. The possibilities are endless, and it’s clear that Ripple is committed to pushing the boundaries of what XRP can achieve. The future looks bright for the XRP community! 🚀💧🌎

Prepare for a paradigm shift — XRP is about to redefine investment as we know it. ✨

 

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🔹 The Valuation Perspective: Compared to trillion-dollar centralized AI companies, the entire Bittensor network has a fully diluted valuation of roughly $20 billion. This is a rounding ...

🤖 Grok Bot adds proactive suggestions that spot work before users ask 🤖

Grok Bot can now identify tasks it may be able to handle and proactively suggest them to users through their selected Primary Bot.

🔑 Key points

🔹 Suggestions are proactive: Users no longer need to initiate every task manually.

🔹 Inbox triage can be suggested: Grok Bot may offer to review, organize, or prioritize incoming messages.

🔹 Meeting preparation can be automated: The Bot can suggest preparing agendas, briefing materials, summaries, or relevant documents.

🔹 Follow-up drafting is included: Grok Bot may identify situations where a follow-up message or response could be prepared.

🔹 Suggestions do not use the weekly quota: The proposal itself reportedly does not count against the user’s weekly usage limit.

🔹 Primary Bot selection is required: The capability becomes available when a Bot is selected as the user’s Primary Bot in the app.

🔹 Memory remains attached to the Bot: The assistant can use the ...

⚡ Chutes’ Kappa matches Llama 3.2 1B using 94% fewer training tokens ⚡

Chutes (SN64) trained Kappa across a decentralized GPU network and reportedly matched or exceeded Meta’s Llama 3.2 1B on several benchmarks using roughly 576 billion tokens instead of up to 9 trillion.

🔑 Key points

🔹 94% fewer tokens: Kappa reached comparable results to Llama 3.2 1B with a much smaller training budget.

🔹 Benchmarks included ARC-C, OpenBookQA, and TruthfulQA: Kappa reportedly matched or outperformed Llama 3.2 1B across those evaluations.

🔹 Training happened across distributed GPUs: Parallax coordinated independently operated hardware in different regions and with different performance levels.

🔹 Training costs were reportedly 90% lower: Chutes estimates Kappa’s cost per training token was significantly below conventional centralized approaches.

🔹 Hybrid architecture improves efficiency: Kappa combines traditional attention with Gated DeltaNet-2 linear attention to reduce memory and compute ...

September 13, 2026
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Revolut Leak Shows the Cost of Constant ID Collection
Revolut’s mistake is the news, but the bigger problem is the growing number of companies being encouraged or required to keep copies of our most sensitive identity documents.

Online bank Revolut has revealed that it gave out sensitive personal and financial information of an undisclosed number of its customers in response to a fake government request.

The information that was handed over to an “unauthorized third party” reportedly includes names, dates of birth, occupations, addresses, phone numbers, account numbers, transaction histories (including Bitcoin), and even copies of government-issued IDs and onboarding verification selfies.

Revolut claims that derived biometric face data was not.

The company said that the data was handed over in response to an email that came from a real government agency’s domain, but was not actually sent or authorized by that agency.

The email passed several authentication checks (SPF, DKIM, and DMARC) that are designed to establish the authenticity of a message’s origin and integrity, but do not verify the legitimacy of the legal request itself.

Revolut said that it complied with the request “under the reasonable belief that it was an authentic government agency request” – and only later found out that it was not.

Revolut said it later realized its mistake, blocked the email address, and reported the incident to the relevant authorities.

Revolut said that only a “limited” number of its customers were affected by the data leak, and that the company’s systems were not hacked, nor was any money stolen.

The story broke on September 11 when Revolut customers started receiving an email notice about a data leak, and the news was picked up by media outlets the following day.

Revolut notice explaining customer identity and financial data was shared after an unauthorized government email request.

The reason this is a recurring problem is that companies are keeping highly sensitive information about their customers’ identities, and sometimes even financial transactions, for a long time, and this data is then available to be disclosed to third parties – either in response to valid legal requests, or, as in the case of Revolut, fake ones.

One reason for this is know your customer (KYC) and anti-money laundering (AML) rules. Revolut’s current UK customer privacy notice spells it out: the company generally keeps personal data of UK customers for no more than seven years after the relationship ends, and sometimes longer – for legal reasons.

This means that even if you close your account, your identity documents don’t disappear.

And while the incident with Revolut happened in the financial sector, it’s by no means the only one that requires customers to hand over sensitive identity information. Discord, a popular chat service, said in an October 9, 2025 security update that government ID photos of approximately 70,000 users may have been exposed after a third-party customer service provider got hacked.

This was not a financial service, nor the same type of attack. But the result was similar – because the underlying business process was the same: requiring and storing sensitive identity documents. In the case of Discord, these were used to review age-related appeals.

It’s hard to do anything about a copy of your old passport, or a photo of your face, or a record of your past transactions. These can be used to identify and profile you, and can be used to carry out targeted fraud. And this can happen even if the initial disclosure didn’t result in financial loss.

The more companies are forced to collect and store such information, and the more of it they have, the more opportunities there are for this data to be leaked, either by the company itself or a third party it works with. That's what makes governments' push for more ID checks just to access ordinary parts of life so reckless.

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This Is The Income A Family Needs To Live Comfortably In Every US State

Here’s the short version of what it takes for a family of four to live comfortably in 2026 by state:

In Massachusetts, you’d need nearly $330,000 a year - the highest figure in the entire country. Only three states clear the $300,000 mark: Massachusetts, Hawaii, and California. At the other end of the spectrum, Mississippi is the most affordable at about $188,000. That’s a full $142,000 less than what you’d need in Massachusetts.

So… how much does a family of four need in your state?

This map shows the pre-tax income a household with two working adults and two kids needs to live comfortably in every U.S. state.

The numbers come from SmartAsset (as of February 2026). They’re based on the familiar 50/30/20 budget: 50% for necessities, 30% for discretionary spending, and 20% for savings or other goals. These aren’t bare-minimum survival numbers—they’re what it takes to live pretty well while still putting money aside.

And as Visual Capitalist notes, Massachusetts sits at the very top of that list. Massachusetts tops the ranking, with a family of four needing $329,555 per year to meet the 50/30/20 benchmark.

Hawaii follows at $313,165, while California ranks third at $302,682.

Rank State Income needed for family of four (2026)

  • 1 - Massachusetts - $329,555
  • 2 - Hawaii - $313,165
  • 3 - California - $302,682
  • 4 - Connecticut - $298,189
  • 5 - New Jersey - $295,110
  • 6 - New York - $291,533
  • 7 - Colorado - $283,213
  • 8 - Washington - $281,798
  • 9 - Oregon - $280,966
  • 10 - Vermont - $280,384
  • 11 - Alaska - $272,064
  • 12 - New Hampshire - $267,904
  • 13 - Rhode Island - $264,659
  • 14 - Minnesota - $263,078
  • 15 - Maryland - $257,837
  • 16 - Maine - $250,931
  • 17 - Montana - $249,434
  • 18 - Pennsylvania - $247,936
  • 19 - Illinois - $244,109
  • 20 - Virginia - $242,944
  • 21 - Nevada - $242,278
  • 22 - Indiana - $241,696
  • 23 - Wisconsin - $238,451
  • 24 - Arizona - $236,870
  • 25 - Utah - $235,789
  • 26 - Delaware - $228,134
  • 27 - Ohio - $226,221
  • 28 - Idaho - $226,054
  • 29 - Florida - $223,392
  • 30 - New Mexico - $223,142
  • 31 - Nebraska - $223,059
  • 32 - Missouri - $217,734
  • 33 - Georgia - $214,573
  • 34 - Michigan - $214,323
  • 35 - South Carolina - $212,909
  • 36 - North Carolina - $212,410
  • 37 - Wyoming - $212,410
  • 38 - Oklahoma - $211,910
  • 39 - North Dakota - $210,496
  • 40 - Kansas - $207,917
  • 41 - Iowa - $204,422
  • 42 - Texas - $203,424
  • 43 - West Virginia - $202,592
  • 44 - South Dakota - $201,760
  • 45 - Alabama - $198,931
  • 46 - Louisiana - $197,933
  • 47 - Tennessee - $197,267
  • 48 - Arkansas - $195,437
  • 49 - Kentucky - $194,854
  • 50 - Mississippi - $187,533

Connecticut, New Jersey, and New York aren't far behind, bringing the number of states with comfortable-income thresholds above $290,000 to six.

Colorado and Vermont Make the Top 10

As expected, many of the highest income thresholds are concentrated in the Northeast and along the West Coast.

However, Colorado has the seventh-highest threshold in the country at $283,213, ranking above Washington and Oregon.

Vermont rounds out the top 10 at $280,384, despite having the second-smallest population of any U.S. state. Meanwhile, nearby states like New Hampshire, Maine, and Rhode Island all fall outside the top 10.

Just Six States Come in Below $200,000

Despite the wide range in living costs across the country, only six states have a comfortable-income threshold below $200,000 for a family of four.

Mississippi ranks lowest at $187,533, followed by Kentucky. The states of Arkansas, Tennessee, Louisiana, and Alabama also fall below the $200,000 mark.

The gap between Massachusetts and Mississippi exceeds $142,000 per year, meaning the Massachusetts benchmark is about 76% higher.

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🤖Can Decentralized AI Stop Big Tech from Owning the Future of Robotics?🤖
The race to build the future of robotics is no longer just about robots. It's about who controls the intelligence behind them.
 
Over the last three years, a small group of companies has emerged as the backbone of the AI revolution. Microsoft provides cloud infrastructure. NVIDIA supplies the chips. Google, OpenAI, Anthropic, Meta, and others develop the models. Together, they control much of the compute, data, and software stack powering modern AI.
 
Now that AI is moving into the physical world, many are asking a bigger question:
 
Will these same companies end up controlling robotics too?
 
It's a valid concern.
 
The latest generation of robots relies on enormous amounts of compute, simulation, training data, and foundation models. Many robotics startups today are built on infrastructure provided by large technology companies. NVIDIA's Omniverse is becoming a key simulation environment for robot training. Microsoft Azure is powering the training of robotics foundation models. Physical AI startups increasingly depend on hyperscale cloud infrastructure to train and deploy intelligent systems. Recent partnerships across the industry show just how central Big Tech has become to robotics development.
But while Big Tech is building the highways, another movement is trying to ensure it doesn't own every destination.
 
That movement is decentralized AI.
 
Why Decentralized AI Exists
 
The idea behind decentralized AI is simple. Instead of a handful of companies owning the models, compute infrastructure, data pipelines, and intelligence networks, these resources are distributed across thousands of participants.
 
This means anyone can contribute compute, contribute models, validate outputs and can participate.
The most visible example today is the decentralized AI network known as Bittensor (@bittensor). The network has evolved into a large ecosystem of specialized AI markets called subnets, where participants compete to provide useful machine intelligence and are rewarded based on performance. Rather than relying on a single company, intelligence is generated and validated by a distributed network of miners and validators.
 
Think of it as an attempt to build an open marketplace for AI instead of a world where intelligence is rented from a few centralized providers.
 
Why This Matters for Robotics
 
Robotics has a unique problem. Unlike chatbots, robots operate in the physical world. They need to perceive environments, make decisions, move safely and they need to learn continuously.
 
The challenge is that collecting and training on real-world robotic data is incredibly expensive. That's one reason large companies have such an advantage. They can afford the compute, simulation environments, and data infrastructure needed to train robotics models at scale.
 
This is where decentralized systems become interesting.
 
Instead of one company collecting all the data and training all the models, decentralized networks could allow thousands of contributors to participate in building robotic intelligence.
 
Imagine a future where:
  • Warehouse robots contribute operational data.
  • Delivery robots contribute navigation data.
  • Factory robots contribute manipulation data.
  • Developers contribute models.
  • Validators evaluate performance.
The resulting intelligence becomes a shared network rather than a proprietary asset.
 
That vision is beginning to emerge.
 
Bittensor's Move Toward Physical AI
 
While many people associate Bittensor (@bittensor) with language models and AI services, parts of the ecosystem are increasingly exploring embodied intelligence and robotics.
 
One example is Kinitro, a subnet focused on incentivizing the training and evaluation of embodied AI systems. The goal is to create competitive environments where developers build robotic intelligence and are rewarded based on performance.
 
The broader Bittensor ecosystem has also expanded into compute marketplaces, distributed inference systems, bandwidth infrastructure, and AI coordination layers that could eventually support robotics workloads. Several subnets now focus on decentralized compute, confidential inference, data transfer, and model training, critical components for future robotic systems.
 
In other words, the pieces are starting to appear.
 
Not a decentralized robot network yet.
 
But the infrastructure that could support one.
 
Beyond Bittensor: The Rise of Physical AI Networks
 
Bittensor isn't alone.
 
Across the industry, researchers and builders are experimenting with decentralized approaches to physical AI.
 
New research published in 2026 introduced the concept of DAO-enabled decentralized physical AI, or DePAI. The idea combines robotics, decentralized infrastructure, AI models, governance systems, and human oversight into a single framework. Instead of centralized control, robots and physical infrastructure could be coordinated through transparent rules and distributed ownership models.
 
At the same time, developers are exploring decentralized operating systems for robots that allow machines to communicate directly with each other and with distributed compute resources. These architectures are designed to make robotic systems more resilient and less dependent on a single cloud provider.
 
The goal is not simply decentralization for its own sake.
 
The goal is resilience.
 
If one server fails, the system continues.
 
If one company disappears, the network survives.
 
If one participant leaves, innovation continues.
 
But Here's the Reality
 
Decentralized AI faces the same challenge every decentralized technology faces.
 
Big Tech has resources. A lot of resources.
 
Training advanced robotics models requires enormous compute budgets, sophisticated simulation environments, access to specialized hardware, and vast amounts of real-world data.
 
That's why many robotics startups still partner with major cloud providers and AI companies. It's often the fastest path to deployment.
 
And there are legitimate concerns about whether decentralized networks can maintain quality, reliability, and security at the scale required for industrial robotics. Even researchers studying decentralized AI systems have highlighted risks around concentration, incentives, governance, and network security.
 
The challenge isn't just decentralizing intelligence.
 
It's decentralizing intelligence while maintaining performance.
 
That's much harder.
 
The Most Likely Outcome
 
The future probably won't be fully centralized. And it probably won't be fully decentralized either. Instead, we're likely heading toward a hybrid model.
 
Large technology companies will continue providing chips, cloud infrastructure, simulation platforms, and foundational research.
 
At the same time, decentralized AI networks will emerge as alternative coordination layers where intelligence, data, and economic value can be shared more openly.
 
The companies building robots may use NVIDIA hardware.
 
Train on Azure.
 
Run foundation models from OpenAI.
 
But they may also participate in decentralized data networks, decentralized compute markets, and decentralized intelligence protocols.
 
The future of robotics could end up looking less like a monopoly and more like an ecosystem.
 
The Bigger Question
 
The real question isn't whether decentralized AI can eliminate Big Tech.
 
It can't.
 
At least not anytime soon.
 
The real question is whether decentralized AI can prevent a future where a handful of companies control every robot, every model, every dataset, and every decision made by the machines operating around us.
 
As robots become workers, assistants, delivery drivers, factory operators, and even economic agents, that question becomes increasingly important.
 
Because the battle for the future of robotics is no longer about hardware.
 
It's about who owns the intelligence.
 
And that battle is just getting started.
 
 

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