XRP Burn: A Growing Concern
When a digital currency is burned, it can usually have a positive impact on its valuation in the future. However, the recent surge in XRP burns is raising some concerns. The burns are tied to Xahau (XAH), a sidechain of the XRP Ledger (XRPL) that is seen as a major rival to XRP.
The release of the Xaman 2.6 upgrade version has fueled the increase in XRP burns. Users are giving up their XRP and importing XAH on the Xahau Network. While this may resemble an airdrop, it could have a significant impact on the value of XRP if not controlled.
It’s important to note that XRP already has a large supply, with over 99 billion in circulation out of a total supply of 100 billion. In comparison, the total supply of XAH is just above 600 million. Not all of the XAH supplies are designated for the switch from XRP.
Although the trend of burning XRP may remove only a small portion of the cryptocurrency, it has the potential to contribute to its long-term valuation. The launch of Xahau on the mainnet is expected to enhance the attractiveness of the XRPL and drive growth for XRP.
Growing Attractiveness of XRP
XRP has become more attractive due to innovative solutions being built on the XRPL. In addition to Xahau, Evernode is another protocol that has generated interest in the ecosystem for its advanced smart contracts ecosystem.
The expansion of the XRPL and the increasing utility of XRP as a payment token have the potential to help it regain its lost price levels, especially after being surpassed by Solana (SOL) in market capitalization.
Hot Take: XRP Burns and the Future of Valuation
The recent surge in XRP burns, driven by the Xahau token claims period, has raised concerns about its impact on the valuation of XRP. While burning a digital currency can be positive for its future value, the motives behind these burns are tied to a rival sidechain. It remains to be seen how this will affect the long-term valuation of XRP.