According to Ripple chief technology officer David Schwartz, management issues for the company’s massive XRP holdings are difficult. In it, Schwartz revealed Ripple has tried to give away 55 billion of its XRP but found it too difficult to do once XRP is available on the open market.
We tried. As soon as you could sell XRP easily, giving away became really, really hard.
— David Schwartz (@JoelKatz) July 17, 2020
Ripple CTO: The payments startup Ripple attempted to give away its trove of 55 billion XRP
In a discussion on how to manage XRP, Schwartz said Ripple’s holdings of cryptocurrencies are similar to the Stellar Development Foundation (SDF )’s management of Stellar Lumens (XLM). Ripple co-founder Jed McCaleb launched Stellar in 2014. Although both assets are designed to boost the speed and lower the cost of cross-border payment solutions, last year, the SDF burned 55 billion XLM in its possession.
The Foundation explained that they have too much money to continue developing XLM and no longer need billions of XLM to continue its mission. However, Tiffany Hayes, who influences cryptocurrencies, says Foundation’s XLM treatment is the complete opposite of how Ripple controls XRP. Ripple has put 55 billion of its XRP into deposit at the end of 2017, selling a share of holdings each month.
All of the currency that was generated into existence when Stellar was formed is used to build and develop the ecosystem. $XLM is used, not $XRP.
— Tiffany Hayden? (@haydentiff) July 16, 2020
Ripple has significantly slowed its XRP sales in recent quarters, and the total amount of XRP in escrow has dropped a total of about 6 billion.
In a new Ask Me Anything on Quora, Schwartz responds to the point-blank question of whether Ripple is pulling the strings on XRP.
“Absolutely not. The XRP Ledger is open-source technology with a robust community of developers, so if Ripple were to vanish, XRP and the XRP Ledger will remain. By design, XRP is an independent digital asset and transactions are validated in a completely decentralized manner through the consensus process – which means the stakeholders in the network are the ones who collectively power the transactions, not any individual or entity.”
As for the fact that Ripple owns roughly 54% of the total supply of all XRP in existence, Schwartz says the company has taken measures to ensure it won’t flood the crypto market with XRP and effectively lower the price.
“While Ripple does own a portion of XRP, it does not give us control over the network. Our transactions have to be approved by the validators just like everybody else’s. At the end of 2017, the company placed 55 billion of the XRP it owns into a cryptographically-secured escrow account. This squashes any concern that Ripple would flood the market with XRP at once – which, by the way, would not be good for us either.”
Schwartz also answered a number of other questions during the ask-me-anything session, which you can check out below.
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