Ripple CTO States Stunning Fact About XRP Burning Via RLUSD Transactions

The XRP community has recently been abuzz with discussions regarding the burning mechanism on the XRP Ledger, particularly about RLUSD transactions.

A question posed on X by a user—“What happens when trillions of RLUSD tokens move daily on the XRP Ledger? Does XRP get burned during these transactions?”—prompted Ripple CTO David Schwartz to weigh in with an explanation.

Understanding XRP Burning

David Schwartz provided a detailed breakdown of the XRP burning mechanism, a core feature of the XRP Ledger. He explained that every transaction on the ledger whether involving XRP or other assets like RLUSD, incurs a fee. This fee, unlike traditional transaction costs that are redistributed to validators or miners, is permanently removed—or “burned”—from the total XRP supply.

The primary purpose of this system is to maintain the network’s efficiency and security. While the fee for each transaction is minimal—typically around 0.00001 XRP—it adds up over time. This gradual reduction in supply ensures that the ledger remains functional and discourages spam transactions.

Minimal Supply Impact Over Time

Schwartz addressed concerns about the long-term impact of burning on XRP’s supply, emphasizing that the effect is minimal. Even under scenarios involving extremely high transaction volumes, the reduction in supply would remain negligible.

For instance, if payment systems like SWIFT, Visa, and Mastercard adopted XRP for billions of transactions daily, the annual burn would account for just 0.0075% of XRP’s supply. This demonstrates that while the supply is technically reduced, the decrease occurs at a slow rate that does not significantly alter XRP’s overall availability.

Implications for the XRP Ledger and RLUSD Adoption

Ripple’s RLUSD stablecoin, set to launch soon, is expected to play a significant role in the evolving stablecoin market, which analysts predict could reach a valuation of $2.3 trillion. As RLUSD gains traction and sees higher transaction volumes, its use will naturally lead to additional XRP burning.

Despite this, Schwartz reiterated that the impact on XRP’s supply will remain minimal in the near term. Instead, the consistent but modest burning contributes to the long-term efficiency and sustainability of the XRP Ledger, further reinforcing its value proposition as a scalable and secure payment network.

Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.

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