David Schwartz, the Chief Technology Officer of Ripple, recently revealed some unexpected details about the company’s XRP holdings and their distribution strategy. In a series of tweets, Schwartz addressed the complexities and challenges Ripple has faced in managing its XRP supply.
Ripple Has Tried Several Methods to Reduce Its XRP Supply
The Company’s XRP holdings are categorized into two distinct groups: XRP that is readily available in its wallets, and XRP that is locked in on-ledger escrows, scheduled for release over the coming months. Ripple cannot access the escrowed XRP until its scheduled monthly release. Historically, a significant portion of this released XRP has been returned to escrow.
… We tried a variety of other things such as sales with lockups and using XRP to incentivize partners. And what we discovered was that everything that worked with more or less no different from selling XRP. … — David "JoelKatz" Schwartz (@JoelKatz) January 8, 2024
Schwartz responded to a query about its XRP distribution, explaining that the company essentially has two options: continue holding a large amount of XRP or reduce its holdings. He emphasized that there is no third option. Contrary to Ripple’s original plan, which aimed to rapidly decrease its XRP holdings, Schwartz admitted that this strategy now seems highly unlikely and might not yield any real benefits.
Initially, the company intended to lower its XRP supply primarily through giveaways. However, once XRP acquired a market price, these giveaways were manipulated for profit, forcing Ripple to cease this approach. Ripple also experimented with other strategies, such as sales with lockups and using XRP to incentivize partners, but found that these methods were essentially equivalent to selling XRP.
Reflecting on the company’s journey, Schwartz noted that the company is more than ten years into what was originally a five-year plan, and is nearly halfway to achieving its goals. He also addressed questions about the possibility of burning the escrowed XRP supply. Schwartz expressed uncertainty about the effectiveness of the escrow system and remained non-committal about the idea of burning the escrowed supply, suggesting that it might not have the intended impact.
This candid revelation from Ripple’s CTO provides a rare glimpse into the inner workings and strategic decisions of one of the leading companies in the cryptocurrency space.
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