The Impact of XRP Token Burns on Value
The total number of XRP tokens burned has reached a significant milestone, prompting questions about the impact of these burns on the value of the tokens in circulation. According to data from XRP Scan, over 12 million XRP tokens have been burned and removed from circulation. However, this represents only a small fraction of XRP’s total available supply, which is over 99.9 billion tokens. Therefore, it is unlikely that the tokens burned so far have had a significant impact on the token’s price.
Burning Ripple’s XRP Holdings
The 12 million XRP tokens burned are cumulative and have been removed from circulation at different times. This explains why the XRP community is calling for burns of Ripple’s own XRP holdings, which currently amount to over 40 billion tokens in escrow. Ripple’s CTO, David Schwartz, doesn’t believe that burning these holdings would yield any real benefits, citing the example of Stellar burning 55 billion XLM tokens without much impact on price.
Challenges in Burning Escrowed Tokens
Burning Ripple’s escrowed tokens is not an easy task and would likely require approval from validators. Disabling the master key on the destination account that receives these funds may not achieve the same purpose as burning tokens and removing them from circulation.
Hot Take: Limited Impact on Value
The recent milestone of 12 million XRP tokens burned may seem significant, but given the vast supply of XRP still available, its impact on value is minimal. While there is interest in burning Ripple’s own holdings, Ripple’s CTO believes it wouldn’t bring substantial benefits. The challenges in burning escrowed tokens further complicate this process. Ultimately, token burns alone may not significantly affect the value of XRP in circulation.
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