Ripple Chief Technology Officer David Schwartz admitted that the XRP community could—in theory—force it to destroy 50 billion XRP it has locked in escrow.
At the current price of $0.60, that would be about $30 billion up in crypto smoke.
Schwartz’s comment came in response to a question on a Twitter thread that asked, “If Nodes, validators and the community at large got together and we agree that its [sic] better for the community to burn the 50 billion XRP ripple has in escrows would that be possible?”
“Yes,” Schwartz replied. “There would be nothing Ripple could do to stop that from happening.”
Public blockchains like XRP “are very democratic,” he explained. “If the majority wants a rules change, there is nothing the minority can do to stop them.”
XRP requires an 80% supermajority vote by validators to amend the Ledger, which must maintain those votes for two weeks. There are about 150 validators, and according to Ripple’s XRP Charts it controls six.
The question references the Stellar Development Foundation’s surprise Nov. 5 announcement that it had burned 55 billion of its 105 billion lumens (XLM)—then trading at $0.07—saying that “the number of lumens we hold now aligns better with our mission.”
That saw a price increase to about $0.085, so the exercise gained the non-Stellar holders of XLM about $260 million—for the $6 billion worth of tokens burned by the Stellar Foundation.
Stellar was created by Jed McCaleb, a founder of Ripple who departed the company. It competes with Ripple on international payments.
Ripple came under fire for several years for routinely selling off hundreds of millions of XRP as they were released from escrow, which detractors claimed kept XRP’s price stagnant. Ripple paused those sales in Q4 2019 and began buying XRP to support the price in Q2 2020.
XRP’s price spiked in late November, doubling in price and winning back its position as the No. 3 cryptocurrency by market capitalization, which the Tether stablecoin had wrested from it earlier this year. So did the Lumen, which also doubled in that time.