Ripple’s Chief Technology Officer Shares Thoughts on XRP Burning Controversy Amid SEC Lawsuit
A key figure in the Ripple ecosystem, David Schwartz, Ripple’s CTO and a founding developer of the XRP Ledger (XRPL), has made a significant contribution to the ongoing debate surrounding XRP burning. In light of the SEC lawsuit against Ripple, which has cast a shadow over XRP’s future, Schwartz has offered insights into the proper burning mechanisms for a healthier XRP market.
Schwartz warns against sending unwanted LP tokens to a designated “burner” address as a solution. This method only removes the LP tokens and not the actual assets within the pool, resulting in an imbalance and an inaccurate valuation of the remaining assets in the pool. Instead, Schwartz proposes “overpaying in the slot auction,” a mechanism within the XRPL consensus protocol. He believes that this approach ensures that the XRP used to create liquidity is permanently removed from circulation, leading to a more accurate valuation of the pool.
The conversation surrounding XRP burning takes place amidst the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC). The SEC alleges that XRP is an unregistered security. This lawsuit has undoubtedly impacted XRP’s price and overall market sentiment, creating legal uncertainty.
Prominent XRPL developer Wietse Wind supports Schwartz’s suggestion, indicating a consensus within the Ripple community regarding the appropriate burning procedure. CNBC predicts significant growth in the crypto market in 2024, potentially reaching a size of US$5 trillion by the end of the year. Additionally, Ripple’s recent entry into the US$154 billion stablecoin market has sparked speculation about a positive impact on XRP’s price, as reported by ZyCrypto.
David Schwartz’s contribution emphasizes the importance of proper burning techniques within the XRPL ecosystem. Despite the hurdles posed by the SEC lawsuit, Ripple’s dedication to innovation and the projected growth of the broader crypto market suggest a promising future for XRP. The development of the XRP ecosystem is far from complete, and the outcome of the burning debate will be closely watched in the coming months.