- XRP fans have become excited by a recent discovery on the XRP Ledger that could boost the coin’s price.
- Coinbase has been considering burning XRP during internal transfers, potentially reducing circulating supply.
- Despite the higher fees, XRP has remained a cost-effective option for small transactions compared to other options.
XRP enthusiasts are buzzing about a recent discovery on the XRP Ledger that could have positive implications for the coin’s price. According to block explorer XRPScan, popular exchange Coinbase might be inadvertently contributing to a decrease in XRP’s circulating supply.
Coinbase Burning XRP on Transfers?
This news follows Coinbase’s resumption of XRP trading after a legal battle with the U.S. Securities and Exchange Commission (SEC) regarding XRP’s classification as a security. The exchange relisted XRP after a court ruling by Judge Analisa Torres clarified that the digital asset is not an investment contract.
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The detail causing excitement is Coinbase’s apparent handling of internal XRP transfers. XRPScan reports that Coinbase might be burning 20 XRP, currently valued at around $10.47, for every internal transfer. This figure is significantly higher than the standard reserve requirement of 10 XRP, which was lowered several years ago.
While the exact reason behind this remains unclear, some speculate it could be a technical oversight. Essentially, Coinbase might be unintentionally burning excess XRP due to outdated settings on their internal wallets. The result, however, could be a decrease in the total XRP supply, a factor that often leads to price increases in cryptocurrencies.
XRP Still a Top Contender
The XRP community is viewing this development as a potential positive for the coin. Thomas Silkjær, Head of Analytics and Compliance at the XRP Ledger Foundation, points out that deleting the associated wallets would be a more cost-effective solution for Coinbase.
By burning XRP instead, Coinbase might be contributing to a decrease in the circulating supply, which could potentially benefit XRP holders in the long run.This discovery further strengthens XRP’s position as a viable payment option.
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Despite the higher-than-necessary fees for internal transfers, XRP’s transaction costs remain competitive compared to other blockchain protocols, especially for smaller transactions. This functionality is a core part of XRP’s defense in the SEC lawsuit, highlighting its utility as a medium of exchange.
XRP continues to be a major player in the cryptocurrency payment space. This potential burn mechanism, intentional or not, could further solidify its position as a fast and affordable option for everyday transactions.
On the Flipside
- Coinbase burns relatively small amounts of XRP for internal transfers, which may not significantly impact the total circulating supply.
- The legal battle between Ripple and the SEC is still ongoing. A negative outcome could overshadow any potential benefits from a decreased XRP supply.
Why This Matters
If Coinbase is burning excess XRP through internal transfers, it could lead to a decrease in circulating supply, which has historically correlated with price increases in cryptocurrency. This potential burn mechanism, on top of XRP’s existing strengths as a fast and affordable payment option, could solidify its position in the cryptocurrency market.
If you’re interested in the legal battle between Ripple and the SEC, you’ll want to read this article about the recent restart of XRP trading by Coinbase for certain users:
Coinbase Reopens XRP Trading for Certain American Users
This article discusses the possibility of an XRP ETF. Ripple CEO Brad Garlinghouse predicts an XRP ETF launch by 2025:
Why an XRP ETF Is an “Inevitable” Step for the Crypto Market
