Last updated on May 18th, 2024 at 12:21 pm
David Schwartz, the Chief Technology Officer at Ripple, has described how the company plans to burn over 40 billion XRP tokens it has held in an escrow account. The idea of burning a substantial amount of XRP tokens has raised speculations and Schwartz’s explanation has also sparked intrigue. Schwartz, a prominent figure in the XRP community shared the details in a recent post on X (formerly Twitter).
Over the months, XRP enthusiasts have expressed concern about Ripple’s handling of the cryptocurrency. However, CTO David Schwartz has addressed the concerns of investors regarding the burning of Ripple’s XRP escrows.
Ripple blackholing escrow accounts
Schwartz described how “blackholing” the related accounts allows Ripple to create the illusion of burning escrows. He clarified that by essentially making the related accounts inaccessible, Ripple might take unilateral action to stop XRP from these escrows from going into circulation.
“If you define ‘burn the escrow’ to mean “ensure that no XRP from the escrow can ever get into circulation”, then Ripple could do that unilaterally by blackholing the account the escrow cancels into,” he said.
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The XRP community is becoming increasingly displeased with Ripple’s heavy involvement in the cryptocurrency and its monthly release of XRP from escrow accounts, which has prompted Schwartz’s response.
The conversations surrounding the burning of XRP escrows have ignited due to recent controversies in the crypto market. Some in the crypto community have accused the company of manipulating the price of the token through automatic sales.
The XRP investors, who believe that Ripple’s actions are affecting the market environment and potentially depreciating the cryptocurrency, are becoming increasingly frustrated as a result of these developments.
Schwartz’s explanation sheds more light on how Ripple plans to burn 40.7 billion XRP tokens. It also details Ripple’s approach to managing its XRP holdings and the speculations about the company’s involvement in manipulating the price of the token.
According to data from Coinstats, XRP is currently changing hands at $0.56 representing a 0.03% drop in the last 24 hours.
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Victor Swaezy
Victor Swaezy is a crypto-journalist with more than 3 years of experience in covering blockchain technology and digital currencies news. Known for his comprehensive reporting, Victor has contributed to leading industry publications such as Coinfomania and Crypto News Guru, providing market participants with the required knowledge to make informed decisions. When he is not working, he loves to watch movies and have a good time.