- A Ripple community member has suggested “burning” 25% of the XRP token supply to drive up its price.
- Ripple has processed around $54 million in its XRP/MXN corridor in one week.
The Ripple community has made a proposal to boost the price of XRP. Community member DanRocky suggested via his Twitter account that the company should “burn” 25% of the existing supply of XRP. That way, the token will experience a price increase. DanRocky stated that burning the token will bring the following benefits:
I think Ripple should do the same with 25 % of their $XRP Holding. Burn it. The money will come back in terms of $XRP price increase. There will be several benefits.
1) organic $XRP price increase
2) more investor confidence
3) less XRP centralization
4) higher market cap than now
DanRocky’s proposal came after the announcement of Bitrue, a crypto exchange, which reported buying 1,651,729 BTR at a price of $67,721. The exchange announced that after receiving a request from the community, they decided to buy this amount to burn it. However, there was no consensus in the Ripple community on the proposal of DanRocky.
One user stated that burning 25% of the supply of the XRP would not have any advantage for Ripple. DanRocky responded that a more critical approach is needed. He also said that the biggest challenge to adoption and the stagnation in the price of XRP is the amount that Ripple holds. The company is using its supply of XRP as part of its financing. Ripple makes programmatic sales of XRP and some think this has led to a stagnation in the price of the native token. However, a report from Ripple has shown the opposite.
Another user stated that Ripple has no interest in doing so and explained that BTR and XRP are very different tokens. The XRP token, according to the user, is expanding its use cases and a burn would be counterproductive to its expansion. In addition, he stated that burning tokens has not had a positive effect on the price in other cases. Users cited as an example the token burn of 55 billion XLMs by the Stellar Lumens Foundation.
Ripple’s XRP demand on the rise
On the other hand, the demand for the XRP token has increasing rapid in recent weeks. According to Ripple’s CEO Brad Garlinghouse, the company has seen a 3% increase in the corridor for the XRP/MXN pair. In the first week of February alone, the platform processed $54 million in this corridor. According to Garlinghouse, this means that Ripple handles almost 10% of all remittance flows from the U.S. to Mexico.
In addition, Bitso CEO Daniel Vogel said he wants to increase the use of Ripple’s product, On Demand Liquidity, which uses the XRP token. Vogel expects Bitso to handle 20% of the total weekly remittance market with ODL. Previously, Bitso and Ripple also opened a payment corridor between Mexico and Argentina. In Latin America, the remittance market is worth more than $30 billion annually. So the high demand in this sector could increase Ripple’s profits and raise the price of the XRP without the need to burn the tokens.
The price of the XRP is at $ 0.27, at the time of publication, and has moved sideways (-0.23%) in the last 24 hours.