Ex-Ripple Exec Shares What Burning XRP Means, But Does It Influence Price?
A former Ripple executive has weighed in on an ongoing debate over XRP token burns, shedding light on their actual impact on an asset’s value. In a heated discussion on X, the executive challenged the XRP community’s long-held belief that burning tokens directly influences their immediate price action or automatically triggers a sharp price rally.
Ex Ripple CTO Reveals Real Impact Of Burning XRP
David Schwartz, the former Chief Technology Officer (CTO) of Ripple, has taken to X to share new details about XRP burning and its direct influence on price. Notably, Schwartz’s statements come in response to the recent backlash and criticism stemming from Ripple’s latest $750 million share buyback.
In a post on March 12, a pseudonymous XRP community member known as ‘XRP Launch’ on X tagged several of Ripple’s top executives, including Schwartz, CEO Brad Garlinghouse, President Monica Long, and CLO Stuart Alderoty. The user questioned the company’s recent share buyback, asking why Ripple would prioritize this approach over initiatives that directly benefit XRP holders.
He urged the executives to consider burning the XRP currently held in escrow rather than pursuing share buybacks that primarily benefit Ripple as a company. In a sarcastic remark, he added that perhaps the escrow cannot be burned, as doing so might push XRP’s price beyond $1.39.
Responding to the remarks, Schwartz shared a price chart illustrating the historical performance of both XRP and Stellar (XLM). The chart highlights volatility in both assets, with notable price spikes in some months and relatively subdued action in others. The former Ripple CTO then challenged the XRP member to identify where, on the chart, XLM had burned half of its total supply.
Notably, Stellar conducted a large-scale token burn in November 2019, eliminating half of its supply. Schwartz argued that, despite the significant reduction in supply, the move had no immediate, direct impact on XLM’s price. The chart showed no meaningful price surge throughout November that year or in the following months, with the only noticeable upward movement appearing around February to March of the next year.
Schwartz pushed back against the user’s claim that burning escrowed XRP would trigger a price rally, arguing that token burns have no direct impact on an asset’s performance or valuation. However, he acknowledged that such actions can, in some cases, exert indirect influence on market dynamics.
Concerns About RLUSD And RWA Impact On XRP Arise
As Schwartz debunked misconceptions about XRP burns, the debate quickly shifted to Ripple’s stablecoin, RLUSD, and the XRP Ledger’s (XRPL) Real-World Assets (RWAs) tokenization. A community member known as Spade reasoned that if burning tokens added no value to XRP, then, by extension, initiatives such as RLUSD, RWAs, and XRP’s role as a bridge asset may also provide little to no direct benefit to the cryptocurrency’s price.
He contended that the only immediate effect these activities would have on the ecosystem is burning XRP, which, according to Schwartz’s argument, would not positively influence the price. Spade further asserted that liquidity generated by using RLUSD does not increase XRP’s value. In his view, buying and holding XRP can increase its price. He also criticized the broader narrative that XRP “frees up capital,” arguing that the concept is counterproductive to the asset’s price growth.
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