{"id":30708,"date":"2023-10-09T10:52:42","date_gmt":"2023-10-09T14:52:42","guid":{"rendered":"http:\/\/cryptocornercafe.com\/cafe\/?p=30708"},"modified":"2023-10-09T10:52:42","modified_gmt":"2023-10-09T14:52:42","slug":"crypto-analyst-presents-data-to-prove-that-xrp-is-deflationary","status":"publish","type":"post","link":"http:\/\/cryptocornercafe.com\/cafe\/2023\/10\/09\/crypto-analyst-presents-data-to-prove-that-xrp-is-deflationary\/","title":{"rendered":"Crypto Analyst Presents Data To Prove That XRP Is Deflationary"},"content":{"rendered":"

In the past, many have argued whether or not the XRP token<\/a> was deflationary or not. In support of the former, pro-XRP crypto analyst Panos Mekras has provided data that suggests that the token has deflationary characteristics.\u00a0<\/p>\n

Number Of Tokens Burned So Far<\/h2>\n

In a tweet<\/a> shared on his X (formerly Twitter) platform, Mekras referenced another tweet<\/a> showing that over 11 million tokens<\/a> had been burned. This stat undoubtedly suggests that the token is deflationary since its total supply has decreased over time due to the burn mechanism.<\/p>\n

However, another X user (@hasen_van) argued<\/a> that the token was only deflationary in \u201crespect to all XRP in existence\u201d and that the token will continue to be inflationary as long \u201cas Ripple keeps on selling<\/a> into the open market.\u201d<\/p>\n

true with respect to all XRP in existence, but from a holders point of view \u2013 given that mostly all exchanges are using circulating supply (x price) to measure market cap, XRP is inflationary as long as ripple keeps on selling into the open market. #fridayfacts<\/a><\/p>\n

\u2014 VanHasen (@hasen_van) October 6, 2023<\/a><\/p>\n

In response, Mekras tried to correct the belief that some XRP tokens were not yet \u201cin existence\u201d as he stated that XRP\u2019s total supply of 100 billion has existed since \u201cday 1,\u201d meaning that 100% of its supply has been circulating from the beginning and some XRP tokens cannot be classified as \u2018non-existent\u2019 yet.\u00a0<\/p>\n

This debate seems to stem from the fact that Ripple has an escrow system in place<\/a>. As such, some (like VanHansen) believe that the XRP in escrow lockups<\/a> does not fall under its circulating supply and that this escrow system affects XRP\u2019s deflationary status. However, people like Mekras argue that the escrow system doesn\u2019t change the fact that the token is deflationary.<\/p>\n

VanHansen further argued<\/a> that the token cannot be deflationary (except technically) as XRP\u2019s circulating supply gets inflated every time \u201cRipple releases XRP from the escrow.\u201d Both sides seemed to look at it from different angles, with Mekras abiding by what deflationary meant in the strict sense while VanHansen was trying to provide a context.\u00a0<\/p>\n\n

Is XRP Deflationary Or Not?<\/h2>\n

It is worth mentioning that the XRP Ledger <\/a>doesn\u2019t exactly have a built-in mechanism to decrease the token\u2019s total supply, unlike some other networks. For instance, Ethereum implemented the London hard fork<\/a>, which introduced a fee-burning mechanism with some Ether burned immediately after processing a transaction.<\/p>\n

Related Reading: When Are AMMs Coming To XRP Ledger? Ripple CTO Gives Clear Answer<\/a><\/p>\n

However, in XRP\u2019s case, these token burns have occurred coincidentally rather than being a deflationary model on the network. In July, an engineer at Ripple explained<\/a> that the monumental increase in the burn rate was mostly because of the XRPL<\/a> account deletions. He mentioned that 2 XRP are usually burned when an account is deleted.\u00a0<\/p>\n

He further noted that 85,556 old accounts on the Ledger were deleted in June, which led to over 100,000 XRP being burned. Hence, the burned token figure rises every time an account is deleted.<\/p>","protected":false},"excerpt":{"rendered":"

<\/p>\n

In the past, many have argued whether or not the XRP token<\/a> was deflationary or not. In support of the former, pro-XRP crypto analyst Panos Mekras has provided data that suggests that the token has deflationary characteristics.\u00a0<\/p>\n

Number Of Tokens Burned So Far<\/h2>\n

In a tweet<\/a> shared on his X (formerly Twitter) platform, Mekras referenced another tweet<\/a> showing that over 11 million tokens<\/a> had been burned. This stat undoubtedly suggests that the token is deflationary since its total supply has decreased over time due to the burn mechanism.<\/p>\n

However, another X user (@hasen_van) argued<\/a> that the token was only deflationary in \u201crespect to all XRP in existence\u201d and that the token will continue to be inflationary as long \u201cas Ripple keeps on selling<\/a> into the open market.\u201d<\/p>\n

true with respect to all XRP in existence, but from a holders point of view \u2013 given that mostly all exchanges are using circulating supply (x price) to measure market cap, XRP is inflationary as long as ripple keeps on selling into the open market. #fridayfacts<\/a><\/p>\n

\u2014 VanHasen (@hasen_van) October 6, 2023<\/a><\/p>\n

In response, Mekras tried to correct the belief that some XRP tokens were not yet \u201cin existence\u201d as he stated that XRP\u2019s total supply of 100 billion has existed since \u201cday 1,\u201d meaning that 100% of its supply has been circulating from the beginning and some XRP tokens cannot be classified as \u2018non-existent\u2019 yet.\u00a0<\/p>\n

This debate seems to stem from the fact that Ripple has an escrow system in place<\/a>. As such, some (like VanHansen) believe that the XRP in escrow lockups<\/a> does not fall under its circulating supply and that this escrow system affects XRP\u2019s deflationary status. However, people like Mekras argue that the escrow system doesn\u2019t change the fact that the token is deflationary.<\/p>\n

VanHansen further argued<\/a> that the token cannot be deflationary (except technically) as XRP\u2019s circulating supply gets inflated every time \u201cRipple releases XRP from the escrow.\u201d Both sides seemed to look at it from different angles, with Mekras abiding by what deflationary meant in the strict sense while VanHansen was trying to provide a context.\u00a0<\/p>\n

Is XRP Deflationary Or Not?<\/h2>\n

It is worth mentioning that the XRP Ledger <\/a>doesn\u2019t exactly have a built-in mechanism to decrease the token\u2019s total supply, unlike some other networks. For instance, Ethereum implemented the London hard fork<\/a>, which introduced a fee-burning mechanism with some Ether burned immediately after processing a transaction.<\/p>\n

Related Reading: When Are AMMs Coming To XRP Ledger? Ripple CTO Gives Clear Answer<\/a><\/p>\n

However, in XRP\u2019s case, these token burns have occurred coincidentally rather than being a deflationary model on the network. In July, an engineer at Ripple explained<\/a> that the monumental increase in the burn rate was mostly because of the XRPL<\/a> account deletions. He mentioned that 2 XRP are usually burned when an account is deleted.\u00a0<\/p>\n

He further noted that 85,556 old accounts on the Ledger were deleted in June, which led to over 100,000 XRP being burned. Hence, the burned token figure rises every time an account is deleted.<\/p>\n

<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"colormag_page_layout":"default_layout","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[82],"tags":[],"class_list":["post-30708","post","type-post","status-publish","format-standard","hentry","category-blockchain"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/30708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/comments?post=30708"}],"version-history":[{"count":0,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/30708\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/media?parent=30708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/categories?post=30708"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/tags?post=30708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}