Paths

In the Ripple Consensus Ledger, paths define a way for payments to flow through intermediary steps on their way from sender to receiver. Paths enable cross-currency payments and exchanges. A single Payment transaction in the Ripple Consensus Ledger can use multiple paths, combining liquidity from different sources to deliver the desired amount. Thus, a transaction includes a path set of possible paths to take. The paths in a path set must start and end with the same currency, although they could use different issuers.

Since XRP can be sent directly to any address, an XRP-to-XRP transaction does not use any paths.

Path Steps

A path is made of steps that connect the sender to the receiver of the payment. In theory, there are many possible types of steps, but in practice, there are only two:

Rippling through another account in the same currency
Exchanging currency at an order book

In the case of a currency exchange step, the path step specifies which currency to change to, but does not record the state of the orders in the order book. Since the order of transactions is not finalized until a ledger is validated, it is impossible to determine for certain which offers a transaction will execute, until after the transaction has been validated. Consequently, you cannot know in advance which offers a transaction will take: only which order books the transaction will use.

Each intermediate account gains and loses equal value: either a balance ripples from a trust line to another trust line in the same currency, or they exchange currencies according to a previously-placed order.

Auto-Bridging

In addition to any order books that are explicitly included in a path, any currency exchange between two non-XRP currencies could potentially use XRP as an intermediary currency in a synthetic order book. This is because of auto-bridging, which serves to improve liquidity across all currency pairs by using XRP as a vehicle currency.

Default Paths

In addition to any paths that are specified in the transaction, a transaction can also execute along the default path. The default path of a transaction depends on the nature of the payment, but basically, the default path is the simplest possible way to connect the sender and receiver using the information provided.

The default path could be any of the following:

The trust line that connects the source account and destination account
The trust lines to the issuer of the source amount and/or destination amount
The order book that connects the source amount to the destination amount

You can use the tfNoDirectRipple flag to disable the default path. In this case, the transaction can only execute using the paths explicitly included in the transaction. Traders can use this option to take arbitrage opportunities.

Technical Details

Pathfinding

The rippled API has two methods that can be used for pathfinding. The ripple_path_find command gets a single response. The path_find command (WebSocket only) provides a path with follow-up responses when a ledger closes or the server finds a better path.

Finding paths is a very challenging problem that changes slightly every few seconds as new ledgers are validated, so rippled is not designed to find the absolute best path. Still, you can find several possible paths and estimate the cost of delivering a particular amount.

Implied Steps

By convention, the sender and the receiver are implied, rather than included explicitly in a path, even though they are the proper first and last steps. Sometimes the second step and second-to-last step are also implied by the issuers of the currencies to send and receive. More specifically:

The first step of a path is always implied to be the sender of the transaction, as defined by the transaction's Account field.
If the transaction includes a SendMax field with an issuer that is not the sender of the transaction, that issuer is implied to be the second step of the path.
If the Amount field of the transaction includes an issuer that is not the same as the Destination of the transaction, that issuer is implied to be the second-to-last step of the path.
Finally, last step of a path is always implied to be the receiver of a transaction, as defined by the transaction's Destination field.

Path Specifications

A path set is an array. Each member of the path set is another array that represents an individual path. Each member of a path is an object that specifies the step. A step has the following fields:

Field	Value	Description
type	Integer	The number `48` indicates a change of currency through an order book. The number `1` indicates rippling through another account.
type_hex	String	A hexadecimal representation of the `type` field.
account	String - Address	(Optional) The address of the account to ripple through.
currency	String - currency code	(Optional) The currency code of the currency to convert to
issuer	String - Address	(Optional) The issuer of the currency to convert to

The type field, used for the binary serialization of a path set, is actually constructed through bitwise operations on a single integer. The bits are defined as follows:

Value (Hex)	Value (Decimal)	Description
0x01	1	A change of account (rippling): the `account` field is present.
0x10	16	A change of currency: the `currency` field is present.
0x20	32	A change of issuer: the `issuer` field is present.

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