- In a suggestion during a debate over Ripple’s majority stake in XRP, a former executive said that the company can choose to burn all of its holdings.
- The debate, however, revolves around whether validators of the XRP ledger would agree to burn the XRP or stay under Ripple’s influence.
Ripple has been engaged in a long-drawn battle with the U.S. Securities and Exchange Commission (SEC) over the sales of XRP tokens. This has kept the XRP price subdued for a long with the cryptocurrency not receiving enough limelight as compared to other altcoins.
However, Ripple Labs along with the XRP community have started discussions over crucial events following the court ruling on the legal battle. Matt Hamilton, the former Director of Developer Relations at Ripple, spoke about the fate of its native crypto XRP if the company requires to dispose of them.
Hamilton suggested an interesting proposal wherein the company could render its entire future escrow funds making them inaccessible to everyone, including themselves, just by disabling the master key on the destination account.
The escrows are set to release to a particular address. Ripple could at any time disable the master key on the destination account. Thus rendering it inoperable. Ie when the funds released from escrow they’d be inaccessible to anyone.
— Matt Hamilton (@HammerToe) May 14, 2023
As of now, Ripple holds XRP in trust for use in order to balance the market. Therefore, Ripple controls a significant supply of the token. This ownership structure has also made crypto community members question the decentralization of the asset.
Hamilton’s suggestion means that Ripple would lose control over the XRP tokens in trust. This suggestion came as members of the XRP community raised concerns about the chances of Ripple pouring tens of billions of dollars worth of XRP into the market. The community thus debated whether it would be possible to burn these XRP tokens. However, it became clear that only the validators of the XRP Ledger could burn it.
Preventing Ripple from Flooding the Market
The recent proposal from former Ripple executive Matt Hamilton provides an alternative solution that would prevent Ripple from flooding the market with XRP. Just by disabling the master key at the destination account, Ripple could make the funds released from escrow inaccessible to anyone.
This would effectively burn the XRP tokens removing them from the circulating supply entirely. However, the debate from the XRP community also erupted into the question of whether Ripple can influence the validators to comply with a court order.
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Some community members said that the judge cannot make a ruling based on something that Ripple is dependent on convincing others to do. But some believed that the validators cannot be bound by any order without being heard.
The debate comes at a time when crypto firms in the United States have been navigating through a challenging regulatory environment. These companies have been working out ways to balance the interest of regulators, investors, and the broader crypto community.
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