Crypto Analyst Presents Data To Prove That XRP Is Deflationary
October 09 2023 - 5:00AM
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In the past, many have argued whether or not the XRP token was
deflationary or not. In support of the former, pro-XRP crypto
analyst Panos Mekras has provided data that suggests that the token
has deflationary characteristics. Number Of Tokens Burned So
Far In a tweet shared on his X (formerly Twitter) platform, Mekras
referenced another tweet showing that over 11 million tokens had
been burned. This stat undoubtedly suggests that the token is
deflationary since its total supply has decreased over time due to
the burn mechanism. Related Reading: 39-Month Cycle Says XRP Price
Is Poised For Breakout To $1,000, Here’s When However, another X
user (@hasen_van) argued that the token was only deflationary in
“respect to all XRP in existence” and that the token will continue
to be inflationary as long “as Ripple keeps on selling into the
open market.” true with respect to all XRP in existence, but from a
holders point of view – given that mostly all exchanges are using
circulating supply (x price) to measure market cap, XRP is
inflationary as long as ripple keeps on selling into the open
market. #fridayfacts — VanHasen (@hasen_van) October 6, 2023 In
response, Mekras tried to correct the belief that some XRP tokens
were not yet “in existence” as he stated that XRP’s total supply of
100 billion has existed since “day 1,” meaning that 100% of its
supply has been circulating from the beginning and some XRP tokens
cannot be classified as ‘non-existent’ yet. This debate seems
to stem from the fact that Ripple has an escrow system in place. As
such, some (like VanHansen) believe that the XRP in escrow lockups
does not fall under its circulating supply and that this escrow
system affects XRP’s deflationary status. However, people like
Mekras argue that the escrow system doesn’t change the fact that
the token is deflationary. VanHansen further argued that the token
cannot be deflationary (except technically) as XRP’s circulating
supply gets inflated every time “Ripple releases XRP from the
escrow.” Both sides seemed to look at it from different angles,
with Mekras abiding by what deflationary meant in the strict sense
while VanHansen was trying to provide a context. Bulls
continue to fight to hold support | Source: XRPUSD on
Tradingview.com Is XRP Deflationary Or Not? It is worth mentioning
that the XRP Ledger doesn’t exactly have a built-in mechanism to
decrease the token’s total supply, unlike some other networks. For
instance, Ethereum implemented the London hard fork, which
introduced a fee-burning mechanism with some Ether burned
immediately after processing a transaction. Related Reading: When
Are AMMs Coming To XRP Ledger? Ripple CTO Gives Clear Answer
However, in XRP’s case, these token burns have occurred
coincidentally rather than being a deflationary model on the
network. In July, an engineer at Ripple explained that the
monumental increase in the burn rate was mostly because of the XRPL
account deletions. He mentioned that 2 XRP are usually burned when
an account is deleted. He further noted that 85,556 old
accounts on the Ledger were deleted in June, which led to over
100,000 XRP being burned. Hence, the burned token figure rises
every time an account is deleted. Featured image from Facts.net,
chart from Tradingview.com
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