How does XUMM exchange currencies (IOU's)?
Exchanging currencies can be quite daunting. But using XUMM makes it easy to trade between currencies. But how does it work?
XUMM will actually make an
OfferCreate transaction on the XRP Ledger. This is effectively a limit order. A limit order basically means that you put something for sale for a certain price and are willing to accept an offer for that price or a higher (better) price. For buying the same goes, you want to buy something for a certain price and are offering that on the exchange, but in the end you can get more for your money.
There are four flavours using an
OfferCreate transaction on the XRP Ledger.
Immediate or Cancel
This transaction method refers to an order to buy or sell that must be executed immediately. You can read more about it here.
Fill or Kill
This is an order that needs to be executed immediately in its entirely, otherwise the order is killed. Here is a good example. This is also how XUMM places your offer when exchanging.
These orders can be easily made with a great user interface on the xrptoolkit.com.
A technical reference is available on on xrpl.org