Ripple’s chief technology officer David Schwartz admitted that validators could force the company to burn 48 billion XRP tokens, whether it agrees with the decision or not.
The company currently has half of the total supply of XRP. In the past, it has been criticized by the community for selling these tokens, but has strongly dismissed any claims of price manipulation. It has also recently stopped using this practice.
IN thread on Twitter, Schwartz announced that the community could vote to burn the total supply of XRP. According to him blockchain this one is “very democratic”.
There was nothing Ripple could do to stop it.
Such changes require 80% validation approval and become active if they remain above this threshold for two weeks. In June, XRPL validators voted to adopt a new amendment, called “The Checks Amendment”, without Ripple’s support. This amendment introduces the possibility for users to issue checks by users for a predetermined amount of XRP that can be cashed at a later time.
Ripple vs Stellar
Schwartz’s comments are something of a postscript to the incident last November. It was then revealed that Ripple could also unilaterally choose to burn billions. During this time, Stellar reduced its total supply of 105 billion XLM tokens to 50 billion.
Schwartz criticized the Stellar Development Fund for burning more than 50% of the total XLM supply:
It’s a shame XRP is decentralizedor someone could burn down half the supply and raise the price to 29 cents.
Co-founder of Stellar Jed McCaleb countered the answer, saying that Ripple can burn the same amount of tokens just as easily.
Wtf are you talking about. Ripple labs can burn half the XRP supply.
– Jed McCaleb (@JedMcCaleb) November 9, 2019
Schwartz admitted that it is possible, however it has to be done by a non-traditional method, such as using the tokens as a fee or sending them to an account that could never be accessed. Ripple has long been the subject of criticism for its routine token sale. According to an XRPArcade report from early 2020, the company has sold an average of 196 million XRP per month since December 2017. By April, a total of 5.5 billion XRPs were sold, or $ 3.45 billion today.
In the second and third quarters of this year, Ripple stopped selling XRP and started buying out tokens to keep their price. In the third quarter, the company purchased XRP for $ 45.5 million.