Ripple top technologist David Schwartz has recently responded to continued accusations that the San Francisco-based firm manipulates XRP price downwards. Critics allege that Ripple streamlined XRP token creation, a key reason cited for the token’s inability to increase in price.
To clarify, Schwartz decided to use X (previously Twitter) and stated that burning tokens or giving them away to others will not drive their price up automatically. He cited the case of Stellar (XLM), the 30th-most valuable crypto by market capitalization, which did not experience any significant change in token value after a huge burning process remained initiated. Schwartz noted that accelerator approaches such as burning or gifting tokens can’t automatically create value or bring price appreciation.
Also Read: Ripple Burns Entire Batch of RLUSD Tokens, Prepares for Stablecoin Launch
Ripple’s Strategy to Manage XRP Supply
It is important to note that Schwartz also pointed to a previous post in which he elaborated on why donating XRP to the wider cryptosphere is useless. This strategy works well for Ripple but could later prove to be a disadvantage since the altcoin started becoming more liquid. He explained that sending or broadcasting XRP is similar to selling the token but with worse outcomes. As Schwartz has noted, scales used such giveaways, and people spend 95 cents to get a dollar’s worth of XRP, many of which wind up in the hands of scammers.
He made it clear that Ripple faces two primary options: The option must decide whether to decrease or maintain holdings of XRP. After careful consideration, Ripple opted for the former, announcing a structured plan to release $1 billion worth of XRP monthly over 55 months. This strategy aims to gradually decrease Ripple’s control over the token supply without disrupting the market.
Conclusion
According to the Ripple CEO’s statements, they work to address criticisms regarding their management of XRP holdings and actively fight against manipulations of its price. It shows how cryptocurrency markets do not allow for simple interventions and underlines the difficulties of supply and demand and stable prices. The decision by Ripple to dribble XRP to the market is also suggestive of a plan that is intended to do so while simultaneously seeking to relinquish control over the same in the market.
Also Read: Ripple Case Faces Uncertain Appeal as Judges Show Support for Torres’ Ruling
