Key facts
- Approximately 32.45 billion XRP is locked in escrow, with a total supply of 100 billion XRP.
- Ripple operates three out of 35 trusted validators on the XRP Ledger.
- Any change to the XRP Ledger protocol requires approximately 80% of validators to agree.
- Ripple CTO Emeritus David Schwartz previously stated that burning XRP from escrow would not positively impact its price.
- Schwartz cited Stellar's token burn as an example, noting it had no real effect on XLM's price and depleted resources.
Fears that Ripple might burn its approximately 32 billion XRP held in escrow have resurfaced within the cryptocurrency community. However, crypto commentator Jake Claver, Chairman of the Digital Ascension Group, asserts that such an action is not currently possible. Claver explained that the XRP Ledger's decentralized validator consensus mechanism prevents unilateral burning of escrowed funds.
According to XRPScan data, around 32.45 billion XRP is locked in escrow, while approximately 67.53 billion XRP is in circulation, out of a total supply of 100 billion XRP. Nearly 1.44 million XRP has been permanently burned through transaction fees, leaving the total burnable amount at nearly 99.99 billion XRP. Ripple owns about 32% of the total XRP supply.
Claver stated on X that Ripple cannot simply burn the escrowed XRP. He elaborated that Ripple operates three of the 35 trusted validators on the network, and any protocol change requires an 80% consensus among validators. This means that destroying the escrowed supply would necessitate the agreement of 28 other independent validators.
In a video attached to his post, Claver emphasized that Ripple cannot destroy the escrowed tokens on its own authority. He reiterated that a vote by UNL validators is required for any such action, similar to a recent vote to update the XRP Ledger to version 3.2.0.
Claver also referenced comments made by Ripple CTO Emeritus David Schwartz in February 2024 regarding Ripple's long-term XRP holdings. Schwartz had indicated that the initial strategy was to liquidate holdings faster, primarily through giveaways, but this approach did not work as planned. He expressed that Ripple does not wish to hold large amounts of XRP for decades but is unsure of alternative options.
Schwartz had previously rejected a suggestion to burn XRP from escrow monthly to support the price. He argued that such a move would likely have no positive impact on XRP's price, drawing a parallel to Stellar's token burn. Schwartz noted that Stellar's burn depleted the foundation's resources without a discernible effect on the XLM price, as evidenced by charts comparing XLM/USD, XLM/BTC, and XLM/XRP.
Both Claver's current explanation and Schwartz's past remarks suggest that Ripple lacks the unilateral authority to burn its escrowed XRP. Furthermore, there is a prevailing belief that such a burn would not significantly benefit XRP's price or the broader ecosystem.