Ripple CTO David Schwartz, known in the crypto community as “JoelKatz,” recently shared their views on the nature of the XRP token.
Ripple CTO David Schwartz, known in the crypto community as “JoelKatz,” recently shared their views on the nature of the XRP token.
In a series of posts, Schwartz clarified that he views XRP, like most cryptocurrencies, as a high-volatility asset that investors hope will appreciate over time, rather than a “lottery ticket” that offers the possibility to obtain an unexpected and significant financial gain.
“I don’t think of it so much as a lottery ticket with the possibility of a big surge, although there’s certainly some truth to that,” he said.
Understanding the mechanics of the XRP market
In the XRP community, discussions about the token and its potential for generating passive income have intensified, especially with the activation of the XRP Ledger (XRPL) automated market maker (AMM).
Unlike staking mechanisms where holding a cryptocurrency can generate passive income, participating in an AMM requires providing liquidity by exchanging XRP for claims against the AMM pools.
This participation does not guarantee a fixed return. This shows a common misconception among some investors about the nature of DeFi products and the associated risks.
The activation of the XRPL AMM has led to misconceptions, particularly around the notion of earning passive income by simply holding XRP.
The clarification aims to educate and moderate unrealistic expectations, promoting a more informed and realistic approach to participating in XRPL’s DeFi features.
Discussions on burning XRP tokens
Discussions within the XRP community have also touched on the topic of burning excess XRP held in escrow.
Calls for a vote on this issue found a response from Schwartz, who emphasized the principle of ownership and control in the cryptocurrency space.
He argued that the decision to burn XRP or any asset should rest with the owner of the asset, reinforcing the fundamental cryptographic principle of individual control over digital assets.