Former Ripple Executive Debunks Misconceptions and Reveals Key Influencing Factors
In a recent Twitter exchange regarding Ripple’s impact on the price of XRP, the former Director of Developer Relations at Ripple Matt Hamilton shared insightful views on the issue. While engaging in a heated debate, Hamilton highlighted key aspects that shed light on the relationship between Ripple’s holdings and XRP’s price swings.
Hamilton pointed out that Ripple is indeed the largest holder of XRP, owning around 48 billion tokens. However, he pointed out that the majority of these holdings are held in escrow contracts. These contracts release a portion of XRP monthly, with Ripple selling only a small fraction and reinvesting the rest in new escrow contracts.
When it comes to price influence, the total daily XRP sales volume worldwide is around 4 billion XRP, so Ripple’s holdings are quite small in comparison. The price of XRP mainly follows the market test and mainly follows BTC.
— Matt Hamilton (@HammerToe) July 16, 2023
Therefore, Hamilton argued that Ripple’s influence in the market is relatively limited considering the global daily sales volume of XRP, which amounts to around 4 billion tokens.
The developer then shed light on the underlying dynamics that really drive the price of XRP. He pointed out that market forces and the performance of Bitcoin (BTC) largely dictate the price movements of XRP.
In the event of a community offence: Burn
Furthermore, Hamilton clarified that neither XRP nor XRPL are under Ripple’s control. To underscore this point, he suggested that if the community deemed it necessary, all of Ripple’s holdings in XRP could be burned.
In response to concerns over Ripple’s significant ownership of the token, Hamilton reassured that this should not be seen as a worrying factor going forward. He explained that since Ripple operates only one validator, the community holds the power to vote for an amendment that would effectively “burn” the company’s assets if they acted against community interests.