Ripple CTO David Schwartz has expressed his support for Xahau’s Burn2Mint feature, stating that it could generate demand for XRP and ultimately boost its price. Despite concerns raised by some users, Schwartz believes that Burn2Mint can be a source of XRP demand.
Xahau, created by XRPL Labs, gained attention within the XRPL ecosystem for its promising features. This sidechain introduces its native token, XAH, and enables the development of smart contracts through early access to Hooks. However, it is the Burn2Mint concept that has captured the interest of the crypto community.
Burn2Mint involves permanently locking up or “burning” XRP tokens in exchange for XAH tokens. This irreversible process ensures that the XRP tokens used in the exchange are gone for good. According to Schwartz, Burn2Mint is not the primary method for acquiring XAH, but rather a contingency option designed to allow XRP holders to obtain XAH in a decentralized and secure manner. The main sources for acquiring XAH will include airdrops, rewards for mints, initial grants, and support from centralized and decentralized exchanges.
One of the arguments in favor of Burn2Mint is that it establishes a minimum price for XAH. By burning XRP, users create a demand for XRP and ensure that they do not end up paying more for XAH than they would have paid for the XRP they burned. This mechanism helps maintain a stable ecosystem for XAH. Additionally, if Burn2Mint is implemented, it will reduce the supply of XRP, which could potentially create a demand for it and benefit XRP holders in terms of price gains.
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Burn2Mint also presents an alternative to the conventional two-way bridge solution. A two-way bridge would require a custodian entity to hold bridged assets on the XRPL, introducing technical and legal complexities and associated risks. Burn2Mint circumvents these complications, offering a more streamlined and secure way to access XAH.
While there is support for Burn2Mint, there are also concerns and criticisms. Some members of the crypto community, such as prominent figure Krippenreiter, predict that only a small portion of the XRP supply will be burned to acquire XAH. They argue that ordinary users and investors may prefer to trade XRP on centralized or decentralized exchanges instead of utilizing Burn2Mint.
Data from onledger.net shows that on November 1, only 44,742 XRP were burned, representing a small fraction of the total XRP supply. However, there have been notable individual transactions, such as one user burning 40,000 XRP in a single transaction to acquire XAH.
In conclusion, Ripple CTO David Schwartz supports Xahau’s Burn2Mint feature and believes it can generate demand for XRP. Burn2Mint provides a decentralized and secure option for XRP holders to obtain XAH, and it also establishes a minimum price for XAH. While there are concerns and criticisms, the initial uptake of Burn2Mint shows promising individual transactions. As the crypto community continues to explore and adopt this feature, its impact on XRP’s price and demand will become clearer.
