A prominent figure in the crypto community has argued that XRP’s 100 billion token cap would be insufficient to facilitate transactions for the global economy.
In a recent statement on X, Versan Aljarrah, the founder of Black Swan Capitalist.io, said that burning XRP tokens is useless. Aljarrah expressed his reservations about burning XRP as the asset reached a noteworthy burning milestone.
Recall that last week, The Crypto Basic discovered that tokens burned from the XRP ledger had exceeded 12 million units.
Key community figures, such as Panos Mekras, co-founder of Anodos Finance, see this milestone positively, underlining that XRP is a deflationary asset.
However, the Black Swan Capitalist founder boldly stated that XRP burns are a futile endeavor. According to him, the XRP supply cap of 100 billion XRP may be inadequate to support the global economy.
100 billion XRP would be inadequate
Aljarrah argued that while the idea of burning XRP tokens may seem appealing, it is ultimately unjustified. According to him, the commercial proposals of companies such as Ripple will absorb the enormous supply of XRP. In his words:
“If you think that 100 billion XRP is enough to serve the global economy, then you still don’t understand Ripple’s goal. Burning XRP tokens sounds tempting, but it’s not necessary.”
If you think 100 billion #XRP is enough to serve the global #economy, then you still don’t understand the goal of #Ripple
Burning #XRP tokens sounds tempting, but it’s not necessary
Because when the time comes, it won’t be enough to satisfy the demand not yet recognized by the #mainstream pic.twitter.com/CrAxlDn6tB
— Black Swan Capitalist (@VersanAljarrah) January 12, 2024
Additionally, Aljarrah argued that when the time comes, there may not be enough XRP to meet demand, especially considering potential future demand not yet recognized by the mainstream.
However, Yousef Al Redha, founder of MoonStudios, dismissed the idea that Ripple’s financial goals could support XRP in the long term.
“Ripples has goals, I’m sure. Do these goals include you and me? Al Redha asked. He highlighted the role of burns in creating a scarcity factor and, by extension, driving the value of XRP.
Meanwhile, UK-based cryptocurrency enthusiast Jason Douglas attempted to clarify the expected demand for XRP in the financial landscape.
Douglas theorized that if XRP captured 2% of the trillion-dollar daily volume moved by JP Morgan, it would amount to $200 billion.
With a limited supply of just 100 billion XRP tokens, Douglas suggested that the price of XRP would need to reach a significantly high value to accommodate such a scenario.
Significantly, the XRPL burning mechanism serves to discourage network spam rather than actively reduce the supply of XRP.
Nonetheless, prevailing voices in the crypto community believe that burns are necessary as they could impact the value of XRP.
