Ripple, a US-based blockchain tech that oversees the distribution of the digital token XRP has sometimes been accused of indiscriminate selloffs of the cryptocurrency it oversees.
Also, Brad Galinghouse, the CEO of Ripple has always claimed that the Payment Company has no control over the price of XRP in the market despite the selloffs.
Judging by the reactions of some of the XRP community members across the crypto space, that seemingly not in concordance with the rate at which the digital token is being distributed, which brings about endless complaints once Ripple unlocks $1 billion XRP in the beginning of the month.
In order to clarify Ripple’s stance regarding the monthly distribution of XRP in large numbers, the CTO at Ripple, David Schwartz released responded to a question on Quora that states that “If XRP is such a wonderful cryptocurrency, why do the founders keep dumping their supply in exchange for fiat every month?”
David Schwartz Clears the Air about the Ripple’s Motive behind Monthly Distribution of XRP
In the short response, David Schwartz shared that XRP Ledger doesn’t apply any form of competitive process for advancement, which implies that the digital token XRP cannot distribute itself.
He referred to the time the XRP Ledger was launched, stating that all 100 billion XRP to ever exist were stored in a wallet in the genesis ledger. This wallet according to him lacked sure security, giving the founders the freewill to tamper with the wallet for personal gain.
From the onset, XRP was preplanned as giveaway for whoever wished to work with the ledger. According to Swartz, the strategy worked as planned but for a very short while.
Afterward, XRP had a market price, which makes it salable. People plunged into the giveaway in order to derive profit from XRP
This also gave room for the willing participants to spam the giveaway in order to accumulate all the funds in a single wallet. All these efforts were put in place by the people to sell the digital token XRP instantly on the open market.
This and other factors seemingly thwarted the strategic giveaway in place. Actually, the best way to get XRP into circulation was to sell the digital token to the market, giving it to the people as giveaway only amounted to selling it in the market for profit.
David Schwartz pointed out that no XRP enthusiast would want a small number of people to control the largest fraction of XRP in circulation forever, so, this makes the selloff strategy seemingly necessary.
He labeled this as a working strategy, rather than selling large amounts of XRP into the market in a small amount, which would economically result to a decreasing price that makes the digital currency expensive to hold, and eventually rendered invaluable for payments.
Conclusively, David Swartz said Ripple has quite been transparent regarding these strategies that had played out and the reasons behind trying them. He said the company will keep building to make its platforms friendly for the people.