The possibility of Ripple ‘burning’ its escrowed XRP funds has come up for discussion. This development could become a major talking point as the XRP community continues to clamor about XRP’s tepid price action.
Can Ripple Burn Its Escrowed XRP Funds?
In a post on his X (formerly Twitter) platform, former Ripple Director Matt Hamilton suggested a way in which Ripple could potentially ‘burn’ its XRP holdings in escrow lockups. He stated that Ripple could disable the master key on the destination account, which usually receives these escrow funds.
Hamilton believes that this achieves the same purpose for which tokens are burned, considering that they become inaccessible to anyone when they are released from escrow. His statement formed part of a larger discussion among some members of the XRP community on what to do with the escrowed funds if there was a need to get rid of them.
Crypto sleuth Mr. Huber had also weighed in on the discussion as he stated that Ripple can’t burn these escrowed funds as the decision isn’t theirs to make. Ripple will apparently need the approval of validators on the XRP Ledger before they can make such a move.
From the discussion, one could see that they were alluding to the escrowed funds possibly being encoded on the XRP Ledger. As such, Ripple will need the permission of these validators to alter the code and burn those funds. However, Hamilton’s comment was more focused on Ripple burning these funds by simply disabling access to the destination account.
Bulls maintain control of price | Source: XRPUSD on Tradingview.com
Ripple Burning Escrowed Funds And Its Significance
Ripple burning their escrowed funds is something that could easily pique the interest of the XRP community. This is true, especially considering recent talks about Ripple deliberately suppressing XRP’s price. As such, there could be shouts for Ripple to burn some of these tokens to show its commitment to XRP’s growth.
However, from all indications, this isn’t a straightforward process, and there is no guarantee that it will affect XRP’s price. At some point in the discussion, XRP YouTuber Moon Lambo alluded to the fact that Ripple’s XRP holdings aren’t part of those in the open market. It has also been reported that Ripple’s XRP transactions do not impact prices on crypto exchanges.
Therefore, there is the likelihood that Ripple burning their XRP holdings (the escrowed funds in particular) might not impact XRP’s price on the open market. Ripple probably knows this, and that is why they haven’t made such a move. Instead, to provide stability to XRP, they return most of their unlocked tokens to escrow.
Featured image from Watcher Guru, chart from Tradingview.com
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