Ripple, a pivotal player in the cryptocurrency realm, set tongues wagging when its director, Matt Hamilton, hinted at the potential to burn all the XRP tokens ensconced in its escrow wallets. This revelation injected a fresh layer of complexity into Ripple’s ongoing legal feud with the U.S. Securities and Exchange Commission (SEC), raising pertinent questions about the fate of these locked XRP reserves.
After this news came out, the XRP community quickly got into heated debates. Kristin Dack, a well-known crypto enthusiast and U.S.-based real estate broker, was one of the influential people who took to X to voice their worries. By pointing out that each token is someone’s wealth, Dack’s X post raised important questions about what it means to back the burning of Ripple’s escrowed XRP. She told people not to support acts that could cause people who invested in XRP to lose money.
She also noted the broader risks associated with allowing a code that could enable seizing and burning XRP, potentially leaving all holders exposed to decisions affecting their holdings.
Hence, the ongoing discussion about Ripple burning the XRP in its escrow stems from the belief that a substantial burn could escalate XRP’s value, consequently benefiting its holders. Ripple’s escrowed XRP balance exceeds a staggering 39 billion tokens, implying the potential of eliminating over $23 billion worth of XRP.
Drawbacks of the Burning Billions in a Row
In response to Dack’s sentiments, another XRP enthusiast highlighted that the XRP community might have overlooked the essential role of the escrow mechanism, which serves as a crucial assurance preventing Ripple from reneging on its commitment to drive XRP adoption.
Many also criticized Ripple that it won’t help in raising XRP value which is already struggling hard to sustain the BTC wave and recently lost its position to Solana.
This debate around Ripple burning the XRP tokens within its escrow wallet has persisted, with Ripple executives, including CEO Brad Garlinghouse, acknowledging the possibility of burning escrowed XRP if it proves beneficial for the overall health of the XRP ecosystem.
