Interview with Phil Rapoport, Director of Markets and Trading at Ripple Labs

Phil Rapoport headshot

Market makers are significant contributors to the overall health of Ripple because they create liquidity. We recently welcomed Phil Rapoport, Director of Markets and Trading, to the Ripple Labs team. We thought you’d enjoy learning more about him and hearing his perspective on Ripple.

Tell us about yourself. What’s your background?

I studied economics and philosophy at Columbia and then spent the last nine years working on Wall Street. Most recently, I was a partner at Macro Risk Advisors where I wrote macro research and sold trade ideas to hedge funds. Prior to that, I was at Goldman Sachs on a cross-asset arbitrage team.

How did you learn about Ripple?

I became fascinated with Bitcoin in early 2011, and I spent a lot of time discussing it with my hedge fund clients and sharing my ideas with the finance community. A client who shared my passion for math-based currencies introduced me to Patrick Griffin, who brought me on as a consultant, and the idea of Ripple just consumed me. I just couldn’t stop thinking about it!

What was it about Ripple that got you hooked?

So, when we talk about math-based currencies, I think there are two big innovations that you can think about individually. You have these new digital currencies with no counterparty risk. And then you have the decentralized payment networks to send them between users. Both concepts are pretty revolutionary.

I think of Bitcoin as a currency first and foremost.  A lot of people focus on its gold-like qualities.  It does also have a very cool payment system to support the currency, but it only supports Bitcoin.

Ripple kind of flips the emphasis around.  Ripple is this very robust, decentralized exchange and payment network.  The currency component, XRP, takes more of a backseat.  It’s something that supports the payment network and allows it to function smoothly.  Ripple is a currency agnostic platform.

I feel like Ripple took the core concepts that made Bitcoin so exciting and married them in a much more broadly adoptable package.  The big story here is about decentralized clearing and settlement.  It’s about making financial transactions feel more like email – quick, easy, neutral and global.  And it’s about connecting a fragmented financial world.  It’s not about a currency replacement for the dollar.  So, I think this is the type of platform that large institutions can rally behind.  And it’s just such an elegant implementation.

What’s your role on the team?

In the short term, I’m very focused on plugging institutional market makers into the network. Good liquidity and tight spreads are a critical piece of the puzzle.

I’m also thinking a lot about market structure and macroeconomic questions that might arise in the future, and making sure that the Ripple ecosystem feels welcoming for traders and finance professionals.

Why should traders get involved in Ripple now?

Decentralized financial networks are a very big deal, and we are in the first innings right now. Institutional investors were pretty dismissive of the space until the April 2013 Bitcoin rally and the ensuing media frenzy. Now I’d say the awareness is there, but the investment has barely even started. This is going to be a tremendous opportunity from many angles and a theme you’ll want to be close to.