David Scwarts stands as the Chief Technology Officer (CT) of Ripple, and gave a statement that’s quite troubling, at least for the Ripple team. Schwartz highlighted how validators could mandate the company to burn its entire XRP token holdings, 48 billion in total, with or without the consent of the company itself.
Making Yourself Vulnerable To Save Face
As it stands now, Ripple itself holds half of the total supply of XRP. This has caused a bit of tension between Ripple and its community due to the company selling off tokens in the past. These accusations of price manipulations have been refuted, of course, and it seems that Ripple had stopped the practice altogether relatively recently.
Through a Twitter thread, Schwarts notified the XRP community that they could indeed vote for Ripple to burn its entire supply of XRP tokens. Through putting a target on his company’s back, he tried to highlight the powerful democracy within the system, as Ripple itself couldn’t do a thing about it should they do it.
Unralated question: If Nodes, validators and the community at large got together and we agree that its better for the community to burn the 50 billion XRP ripple has in escrows would that be possible? 🤔
— IKHOR [FIAT-Limpator] (@ethanjames0394) December 2, 2020
The Checks Amendment Proving This
Amendments to the XRP Ledger mandates a minimum of 80% approval for the validators of the ledger. These amendments are subsequently activated should this approval stay above that threshold for a period of two weeks. It was back in June this year when an XRPL amendment was adopted through validator votes: The so-called Checks Amendment. This amendment was done without the support of Ripple.
The Checks Amendment, as the name would imply, allows users to write out checks for other users, who could den redeem this predetermined amount of XRP at a later period of time.
The comments made by Schwarts came as something of a commentary over an incident that happened last year in November. Back then, it was discovered that Ripple had the ability to unilaterally decide to burn excess supply by the tune of billions. In a similar time frame, stellar had already opted to more than half its own supply, going down to 50 billion XLM as opposed to 105 billion it originally was.
Ripple Trying To Improve Its Image
Ripple itself has been the butt of many criticisms throughout the years, thanks to its routine habit of selling tokens on mass. XRPArcade issued out a report in early 2020, showing that the firm had sold 196 million XRP a month on average ever since December of 2017. Tallying it up, 5.5 billion XRP had been sold through this, worth around $3.45 billion in today’s market.
Ripple had stopped its massive XRP sales within the second and third quarter of this year, buying its tokens back in order to try and support its price. An example of this would be a $45.5 million purchase of XRP made in Q3 2020.