Ripple could burn $ 29 billion tokens.
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Ripple could burn $ 29 billion tokens. How will this affect the XRP rate?
CTO of a blockchain startup David Schwartz spoke about the conditions under which a company can burn 48 billion of its coins and how this will affect its value.
David Schwartz, CTO of blockchain startup Ripple, has confirmed that the XRP token network validators involved in transactions can force the company to burn its 48 billion coins – that’s just over $ 29 billion, a company spokesman said on his Twitter account, answering a question subscriber.
Ripple will not be able to prevent the burning of tokens if the entire cryptocurrency network validator community votes for such a decision, Schwartz emphasized. He added that coins can be destroyed, for example, if paid as a transaction fee or sent to a wallet that no one has access to.
Yes. There would be nothing Ripple could do to stop that from happening. Public blockchains are very democratic. If the majority wants a rules change, there is nothing the minority can do to stop them.
— David Schwartz (@JoelKatz) December 2, 2020
“There is no way Ripple can stop this. Public blockchains are very democratic. If the majority wants to change the rules, the minority will not be able to prevent it in any way,” – wrote Schwartz.
How can this affect the XRP (Ripple) price?
Ripple has issued just 100 billion XRP tokens. In 2017, the company froze 55 billion coins, thus showing that it would not be able to sell the entire stock of the cryptocurrency at once and crash its rate. Since then, the startup has been unlocking 1 billion XRP every month. At the moment, according to the Ripple website, there are still 48.3 billion XRP in storage.
If Ripple burns 48 billion tokens, which is half of the emission of the cryptocurrency, this could positively affect its price. This has already happened with the Stellar project. In November 2019, the Stellar Development Foundation (SDF) destroyed 55 billion of its XLM tokens – just over half of the asset’s issuance – followed by a 16% rise in value.
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