Ripple CTO Highlights How Xahau’s “Burn XRP to Mint XAH” Model Could Drive XRP Demand

David Schwartz, Ripple’s Chief Technology Officer (CTO), has shared his support of Xahau’s Burn2Mint method, acknowledging that it could potentially boost XRP’s demand.

Xahau, which operates as a sidechain on the XRP Ledger (XRPL) to facilitate the execution of smart contracts, has recently made its debut alongside its proprietary digital currency, XAH.

Nonetheless, some members of the XRP community have expressed concerns regarding the necessity of burning their XRP tokens in exchange for XAH through a procedure known as Burn2Mint.

It’s essential to emphasize that this process is irreversible and involves the permanent forfeiture of XRP tokens.

Ripple CTO Explains Why He Supports the Burn2Mint Concept

In the face of these concerns, Schwartz has openly given his support to Xahau’s Burn2Mint strategy.

In a post on X, he explained the advantages of this approach, emphasizing that it is not the primary method for obtaining XAH. Furthermore, he outlined that the main channels for obtaining XAH will encompass airdrops, minting rewards, initial grants, and centralized and decentralized exchange.

Burn2Mint serves as a backup solution to enable XRP holders to access XAH in a decentralized and secure manner, particularly in the early stages. He suggested that Burn2Mint addresses potential challenges that could impede Xahau’s launch, such as a scarcity of XAH or liquidity problems.

Moreover, Schwartz clarified the rationale behind Xahau’s choice of Burn2Mint over a two-way bridge solution. Implementing a two-way bridge would require a custodial entity to manage bridged assets on the XRPL, which would introduce technical and legal complexities.

Schwartz also addressed XRP holders who might be reluctant to use their tokens to obtain XAH. He mentioned that if Burn2Mint goes unused, it won’t affect them. However, if used, it will reduce the available supply of XRP and generate a demand for it, which is advantageous for these holders.

Xahau’s Impact on XRP Supply

Xahau was introduced to improve XRPL’s capabilities and scalability. On the other hand, amid the discussions about Burn2Mint, Krippenreiter (@krippenreiter), a prominent community member, predicted that only a limited number of market participants would likely employ this mechanism.

He suggested that users might burn less than 1% of XRP’s total supply to acquire XAH, his rationale being that everyday users and investors lack a compelling reason to use Burn2Mint to exchange XRP for XAH.

Instead, they are more likely to opt for trading on centralized or decentralized exchanges in the future rather than engaging in coin burning. Now that Bitrue has announced the listing of XAH, the community is waiting to see what comes next.

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Tobi Loba

Tobi Loba is a passionate writer with a vast interest in the stock market. She joined the crypto ecosystem about three years ago and has written lots of ebooks and articles in relation to cryptocurrency and blockchain projects. Tobi Loba earned her degree at the University of Ibadan.