Ripple CTO Ends Speculation About Control Over XRP Price
Ripple CTO David Schwartz denied claims that the company's large XRP holdings suppress the token's price, arguing the logic doesn't hold as XRP's value would cancel out whether Ripple holds it or not. Ripple currently holds 34.75 billion XRP in escrow, releasing it gradually, which critics say gives the company too much control. Schwartz clarified that Ripple's role does not affect how the XRP Ledger operates, emphasizing the network's independence. He also noted XRPL validators don't earn money from transactions, unlike Bitcoin or Ethereum, and the network is designed to remove middlemen. The issue of Ripple's influence on XRP was central to the SEC v. Ripple case, which the company partially won.
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Ripple CTO Denies Claims of XRP Price Manipulation
Ripple Chief Technology Officer David Schwartz refuted allegations that Ripple's significant XRP holdings are suppressing the token's price. In a heated debate on X (formerly Twitter), Schwartz declared the criticism "doesn't make sense." He argued that if XRP were worth more without Ripple, its value would also decrease during purchase or sale transactions, effectively canceling out any perceived impact.
Ripple's Escrow Plan and Market Influence
Ripple currently holds 34.75 billion XRP locked in escrow, intending to release it gradually. Critics often assert that this reserve grants the company excessive control over the asset's flow. However, Schwartz rebutted, saying Ripple's role does not influence the functioning of the XRP Ledger (XRPL) or user transactions on it. He stated explicitly, "If the value of XRP would be higher without Ripple, then that means its value is lower when you buy and lower when you sell. That pretty much cancels out unless Ripple somehow changes its level of influence in the future."
Clarification on XRPL's Design and Transaction Model
Schwartz previously highlighted that validators on XRPL do not earn money for confirming transactions, setting itself apart from Bitcoin miners or Ethereum stakers. This design intentionally eliminates middlemen and ensures that no central party directly profits from user activity or transaction fees across the network. Schwartz emphasized that anyone can use XRPL independently of Ripple.
Controversy: Ripple's Role and the SEC Case
Criticism of Ripple includes claims that it acts as a "macro-miner," selling XRP to finance its operations. Conversely, other analysts argue that Ripple's involvement aids the network's growth. This duality lies at the core of the long-running SEC v. Ripple case, where Ripple achieved a partial victory. Schwartz reiterated that transaction fees on XRPL, minimal and worth only fractions of a cent, exist solely for spam protection and not to generate profit for Ripple.