Prev.
Although Ripple has been blamed in the past for selling XRP tokens, Ripple would be at the mercy of its community just as much. That is what his CTO, David Schwartz, says, according to whom a governance vote could force Ripple to burn its 48 billion XRP.
However, could this extreme practice take place? Not for the moment, especially since the company is putting an end to a decried practice. Ripple owned 50% of all XRP tokens and used to sell its tokens regularly.
While these sales allowed her to cash in, they also caused the price of the cryptocurrencies to fluctuate. And for other XRP holders, these sales were therefore detrimental.
Does Ripple have too much power over the management of the token? According to its Chief Technology Officer, David Schwartz, this is not the case. Worse, a simple vote could force Ripple to deprive itself of all its capital, or 48 billion tokens.
At least that’s what he claims on Twitter, insisting on the “very democratic” nature of the blockchain. However that such a governance vote requires the approval of 80% of the validators. A number that would be very hard to reach.
But in addition, this threshold must remain at this level for two weeks. In short, Ripple’s tokens can be considered secure. Getting such a quorum is not impossible though.
In June, 2 amendments were approved by the blockchain validators without Ripple’s support. But pushing the company to destroy 48 billion XRP tokens would be of no interest to the community.
If this subject comes back to the forefront, it is in reference to a polemic dating back to 2019. Stellar then decided to reduce the number of tokens from 105 to 50 billion. More than 50% of XML tokens were burned.
David Schwartz reacted by emphasizing the decentralization of XRP, preventing such a decision. This comment made Stellar co-founder Jed McCaleb react, arguing that Ripple could do the same.
But it works both ways, the CTO argues. “Yes. There would be nothing Ripple could do to prevent that from happening. Public blockchains are very democratic. If the majority wants a rule change, the minority can’t do anything to prevent it.
The community’s criticisms however have focused on Ripple’s recurring sales of XRP. Since December 2017, it would have sold an average of 196 million XRPs per month. By April 2020, this represented 5.5 billion tokens and $3.45 billion. Enough to evaluate much of the currency held by long term holders.