XRP, the native token of the XRPL protocol, has recently experienced a decrease in its total supply. Over the course of the last 30 days, approximately 247,016 XRP tokens were permanently burned, effectively reducing the total circulating supply of the cryptocurrency.
This trend was first brought to light by an anonymous Twitter account, which sparked a wave of speculation within the XRP community. Neil Hartner, a senior staff software engineer at Ripple, felt compelled to address the ongoing conjectures about this token burn. Hartner’s clarifications have provided the crypto community with valuable insights into the internal workings of the XRP Ledger and the potential implications for its native token.
Hartner revealed that this unexpected burn of XRP tokens was due to a series of accounts being removed from the XRP Ledger. Each time an account is deleted, two XRP tokens are burned, leading to a net decrease in the total XRP supply. These deletions have mainly targeted dormant accounts that once held a balance of 20 XRP, which was the former account reserve amount.
The revelation of these account deletions has sparked a renewed interest in understanding the underlying dynamics of the XRP Ledger network. It highlights how operational decisions like account deletions can have a ripple effect on the circulating supply of the native token, potentially influencing its value and market dynamics.
One of the significant events contributing to this substantial token burn was the actions of Poloniex, a crypto exchange. In June 2023, Poloniex reportedly deleted 85,566 outdated XRPL accounts, resulting in the burning of 171,132 XRP tokens, as mentioned by Hartner. This account purging process has now concluded, suggesting that the account deletions and subsequent token burns may not continue at the same rate.
Interestingly, despite the decrease in XRP’s total supply, the asset has been in a downward trend since the beginning of the day. In the past 24 hours, XRP has experienced a 3% drop in value and is currently trading at $0.47 at the time of writing. The XRP market cap has also declined nearly 5% in the past two weeks.
The current market cap value of XRP stands at $24.6 billion, representing a drop of more than $1 billion from the valuation of $25.9 billion seen late last month. However, it is worth noting that XRP’s daily trading volume has steadily increased over the past week. In the last 24 hours alone, the trading volume has surpassed $800 million, up from $669 million seen just a week prior.
It is important to consider these developments in the context of the overall cryptocurrency market. While XRP may be experiencing a decrease in its total supply, the asset’s value is subject to various factors such as market sentiment, investor demand, and regulatory developments. Therefore, it is essential to closely monitor these factors to gain a comprehensive understanding of XRP’s future outlook.
In conclusion, the recent decrease in XRP’s total supply due to account deletions and subsequent token burns has elicited significant interest and speculation within the XRP community. While this event has undoubtedly impacted the circulating supply of XRP, it is crucial to analyze other market factors to assess the potential impact on the cryptocurrency’s value and market dynamics.