Ripple’s huge XRP holding has recently been a topic of interest in the token community. Accordingly, David Schwartz, the Chief Technology Officer at the crypto solutions company took time to address the issue in a series of tweets.
Recall that a certain XRP community member bearing Sir Clown Sniper highlighted some of the misconceptions surrounding Ripple and XRP. One of the 10 things he wants the XRP community to get right included Ripple’s handling of the billions of XRP in its custody.
Sniper pointed out that the Silicon Valley tech company draws almost all of its revenue through XRP sales. “Ripple still sells XRP (regardless of who it is to) and it accounts for 98% of their revenue,” Sniper wrote last week.
David Schwartz’s attention was drawn to this issue on Thursday by a certain pseudonymous user, who requested a response from the Ripple CTO. Schwartz submitted that most of the points outlined by Sniper are true, including the fact that Ripple still sells its gifted XRP tokens.
However, he added that the major reason the cross-border payment firm keeps offloading its XRP holding is to make the crypto project not appear centralized. According to him, several people submit that Ripple holds too much XRP, hence the company’s best option is to sell off
Recall that the creators of XRP gifted Ripple 80% of the token’s total supply in 2012. At the time of writing, Ripple holds over 44 billion XRP in escrow. Selling out this huge volume would contribute to decentralization, Schwartz implied.
“If you define “sell” broadly, then yes, “selling” XRP does account for most of Ripple’s revenue. But realistically, our choices come down to selling XRP or holding XRP and most people think we hold too much,” Schwartz wrote. He added that “there is nothing else Ripple can realistically do with its XRP and the general consensus is that it would be better if Ripple held less XRP.”
There is nothing else Ripple can realistically do with its XRP and the general consensus is that it would be better if Ripple held less XRP.
— David "JoelKatz" Schwartz (@JoelKatz) April 14, 2023
In response to the suggestion of Ripple burning its XRP holdings, Schwartz stated that burning XRP will never be an option for the company. More so, he believes burning will have no positive effect on the project, citing Stellar Lumens (XLM) token burns.
“I don’t think Ripple would ever do it because it’s hard to imagine how it could be in Ripple’s interest. But also I don’t think it would be a good idea. Stellar did this and it accomplished nothing beneficial as far as I can tell,” he remarked.
On the other hand, a popular crypto enthusiast proposed that Ripple should use its XRP in escrow accounts for its recently launched Liquidity Hub project or gift them to a DAO, condemning the company’s act of selling. It bears noting the recently launched Ripple Liquidity Hub supports several other cryptocurrencies except XRP. According to Ripple, this is because XRP lacks regulatory clarity.
Why is #ripple still selling #xrp to fund its business, but not using it as a financial tool within the liquidity hub? @JoelKatz https://t.co/jc1YTaigwc pic.twitter.com/OKUAm0Q1CG
— Jay’V🪬 (@JayVTheGreat) April 14, 2023
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