The XRP community has been reacting to the speculation that Ripple is moving to burn its substantial XRP holdings currently held in escrow. This speculation has gained momentum as XRP’s recent performance has seen a seven-day decline. At $0.4815, XRP is down 8.15% in seven days, and the community is presenting desperate suggestions.
XRP Whale (@realXRPwhale) shared the rumor, stating, “BREAKING: Rumors circulating that Ripple could burn the entire escrow of 50 BILLION $XRP! THIS COULD TRIGGER A HUGE PRICE SURGE!”
🚨BREAKING: Rumors circulating that Ripple could burn the entire escrow of 50 BILLION $XRP!
THIS COULD TRIGGER A HUGE PRICE SURGE!#XRP 🚀🌖
— XRP whale (@realXRPwhale) October 11, 2023
Read Also: Ripple Unlocks 1 Billion XRP From Escrow As Market Value Dips
Understanding the Escrow
It is necessary to clarify that Ripple’s XRP in escrow is less than the rumored 50 billion XRP. In August, Ripple revealed that it held 41,900,000,005 (41.9 billion) XRP in escrow.
Every month, the XRP Ledger (XRPL) releases 1 billion XRP from escrow. Some of this is released into the market, and the rest is sent to escrow. Ripple locked 55% of XRP’s token at the beginning of this process, with the plan to release 1 billion XRP every month for 55 months. It is a strategic move aimed at maintaining liquidity and was introduced in 2017.
Reducing token supply, or the “deflationary” model, is used by many cryptocurrencies to ensure increased demand and increased prices. This practice is one of Shiba Inu’s main strategies, and XRP’s deflationary status caused some debate on X recently.
XRP Whale and those pushing the rumor believe that Ripple burning the 41.9 billion XRP tokens in escrow will cause a price surge. Interestingly, they might be right because token burns had worked for SHIB.
Read Also: Ripple Returns Whooping 900 Million XRP after Unlocking 1 Billion Tokens from Escrow: Details
XRP Community’s Reaction
The XRP community had a mixed response to this rumor. Some enthusiasts welcome the idea, seeing it as a potential catalyst for price appreciation. However, others dismiss the rumor as baseless, attributing it to unofficial sources.
One user pointed out that Ripple might not be willing to burn that much money. Another user asked what the new price would be if Ripple burned its XRP and got the response that XRP’s price would double.
Can Ripple Burn its XRP in Escrow?
This conversation is not entirely new. Months ago, former Ripple director and software engineer Matt Hamilton suggested that Ripple could destroy all the XRP tokens in escrow if it chose to do so.
Notably, in an interview from 2021, Ripple CEO Brad Garlinghouse stated that the company might consider burning escrowed XRP if it benefits the overall health of the XRP ecosystem. Hamilton also shared in the past that Ripple’s XRP in escrow does not have any major effect on XRP’s price.
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