Expert Says Burning XRP Does Not Affect XRP Price

As XRP Ledger-based chain Xahau goes live, giving market participants an opportunity to mint XAH by burning XRP, the XRP Army ponder the impact of such an ongoing system on XRP.

Specifically, they are curious about the rate at which XRP is being burned as people exchange it for XAH tokens via minting.

In a recent tweet, well-known XRP community influencer WrathofKahneman (WoK) responded to an inquiry about the implication of XRP burns for its price amid the XAH minting. Notably, this curiosity is rooted in the widespread ideology that the value of a token tends to appreciate as its circulating supply deflates. 

However, WoK asserted that burning XRP has insignificant impacts on its price. Notably, the foundation of WoK’s assertion is that the amount of XRP burnt is so inconsequential that it has no resultant effect on its market value. In his words:

– Advertisement –

“Theoretically, it reduces the supply of XRP and should push the price up. But in reality, it requires so little XRP, especially at first, that I don’t think it does much of anything.”

Tbh, I don’t think it does. Theoretically, it reduces the supply of XRP and should push price up, but in reality it requires so little XRP, especially at first, that I don’t think it does much of anything.

— WrathofKahneman 🪝 (@WKahneman) October 31, 2023

Furthermore, in the thread, WoK emphasized that though XAH minting is in progress and XRP is being burned, the data recorded on XRPScan does not solely represent the burn associated with the Xahau network.

Notably, stats from XRPScan suggest that the XRPL has witnessed the burn of 11,702,058 (11.7 million) XRP tokens out of the max supply of 99.98 billion.

It is worth mentioning that the burn mechanism of XRP Ledger does not intend to push the price of XRP up from deflation, unlike some other crypto projects.

Its primary purpose is to address and mitigate the risks associated with spam transactions on the network. Nevertheless, the mechanism has the unintended consequence of gradually reducing the supply of XRP.

XAH Minting with XRP 

Meanwhile, The Crypto Basic reported yesterday that the pro-XRP exchange Bitrue introduced a seven-day locking schedule for XRP investors to mint XAH with XRP.

According to the report, those who burn their XRP via the minting portal would receive an equivalent amount of XAH at the end of the schedule.