Crypto analyst Mason Versluis has criticized Ripple’s revenue model, claiming that the firm sells XRP to support its business. In a recent discussion, Versluis argued that Ripple and other crypto-based payment firms lack revenue streams and rely on their associated cryptocurrencies to fund their operations.
Versluis also claimed that this situation is the norm in the crypto space, with most crypto tokens being used to raise funds rather than having a real business. He singled out Ripple for further criticism, claiming that the firm’s revenue is closely tied to the performance of XRP and that the company needs XRP’s price to go up in order to make money.
The TRUTH About Ripple DUMPING $XRP On YOU! 🤫 pic.twitter.com/bH6HD4cPIQ
— MASON VERSLUIS (@MasonVersluis) October 17, 2023
Read Also: Amid Claims That Ripple Dumps XRP, Analyst Says “Be Proud To Be Blacklisted”
Versluis’s criticism is not new, but it does raise some important questions about the sustainability of crypto-based payment firms. If, as Versluis claims, these firms are reliant on selling their associated cryptocurrencies to fund their operations, then they may be vulnerable to market downturns.
XRP Supply Debate
Versluis also pointed to the increasing circulating supply of XRP tokens over time, suggesting that this will prevent the price of XRP from seeing a significant uptick.
However, some crypto experts have disputed this argument, claiming that all XRP tokens existed from the beginning and that locking XRP in escrow does not fundamentally alter the fact that the tokens were already circulating.
Ripple’s XRP Revenue Model: Taxation or Value Capture?
One way to view Ripple’s XRP revenue model is as a form of taxation. Ripple is essentially taxing XRP holders by selling XRP and driving down the price of the asset. This tax revenue is then used to fund Ripple’s business.
This tax can be seen as a necessary evil. Without it, Ripple would not be able to generate revenue and support its business. However, it is important to be aware of this tax and to factor it into your investment decision.
Read Also: Ripple’s XRP Monthly Sales Ignite Discussion In XRP Community
Another way to view Ripple’s XRP revenue model is as a form of value capture. Ripple is capturing some of the value created by the XRP network. This value capture is then used to fund Ripple’s business.
This value capture can be seen as a positive thing, as it allows Ripple to continue developing the XRP network and making it more valuable for users. However, it is important to be aware that this value capture is taking place and to ensure that you are receiving a fair share of the value created by the XRP network.
Follow us on Twitter, Facebook, Telegram, and Google News
