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Suggestion: Burn 50 billion XRP

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1 hour ago, Montoya said:

It would possibly be a criminal act for Ripple to do this as it would violate their fiduciary responsibility to shareholders. It is mathematically not in their interest to do so. They would be losing more in market cap than they would stand to gain in any increased value. It would essentially be a wealth transfer from Ripple to other XRP holders.

This. A 1000%. XRP holders care about price. Ripple cares about revolutionizing the global financial system. XRP will rise as they do this, but they are not worrying about short term price. 

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I already expected this question being asked once I saw the news from XLM and showing a (probably) short-term price increase. The increase in price however is nowhere near high enough to compensate the amount burnt.

To me this only shows how weak the currency is, with not enough demand to justify the supply. If Ripple would do the same it would also show weakness in my opinion.

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3 hours ago, Montoya said:

It would essentially be a wealth transfer from Ripple to other XRP holders.

1 hour ago, Uloveme said:

The increase in price however is nowhere near high enough to compensate the amount burnt.

These are the statements that keep needing to be reiterated every time this topic comes up. Anything that removes circulating supply will yield a price increase as a whole. However, it is impossible for someone to remove their crypto from the supply, but also come out profitable.

 

Imagine the following scenario where Stellar Foundation owns 80B XLM, while you own 20B XLM:

+--------------------+--------------+--------------+-------------+
| Who                | Supply Owned | Market Value | Net Value   |
+--------------------+--------------+--------------+-------------+
| Stellar Foundation | 80B XLM      | $0.08 USD    | $6.4B USD   |
+--------------------+--------------+--------------+-------------+
| You                | 20B XLM      | $0.08 USD    | $1.6B USD   |
+--------------------+--------------+--------------+-------------+

 

If Stellar decided to remove 50% of the total supply, then, to maintain the same market cap, the value of XLM should go up by 100%. Obviously this didn't happen and part of that reason is that not all the supply was in circulation, but this is all hypothetical to show the math behind why this is unreasonable. Assuming that they committed to remove 50B of their XLM so that the total supply goes from 100B to 50B. We get left with this:

+--------------------+--------------+--------------+-------------+
| Who                | Supply Owned | Market Value | Net Value   |
+--------------------+--------------+--------------+-------------+
| Stellar Foundation | 30B XLM      | $0.16 USD    | $4.8B USD   |
+--------------------+--------------+--------------+-------------+
| You                | 20B XLM      | $0.16 USD    | $3.2B USD   |
+--------------------+--------------+--------------+-------------+

This yields them a net loss of $1.6B USD, while you have a net gain of $1.6B USD. This is because they own proportionally less of the total market cap than they did pre-burn. The only scenario that would be fair to everyone (and to maintain net value) is to proportionally burn the 50B in total from everyone. In this case, they'd burn 40B, while you burn 10B. Sadly though, this does absolutely nothing to increase the value of the crypto.

Edited by Xrylite
Minor grammar tweaks.

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21 minutes ago, Uloveme said:

To the fed? No thanks, no one wants that. IMF/The World Bank sure, also makes a lot more sense.

yup, the IMF will play a major role in this...global digital reserve currency...

former chief economist of the IMF at swell...

Screen Shot 2019-11-05 at 12.25.08 PM.png

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No, Ripple should not do it, at least not well into the foreseeable future.

What Stellar did is closer to capitulation than to anything else. From the Stellar.org report:
 

Quote

“We didn’t start by wanting to burn. We started by asking ‘what do we need?'” Dixon told the room of roughly 200 attendees. “As much as we wanted to use the lumens that we held, it was very hard to get them into the market.”

Now tell me: what does this say about XLM? I would find it a (very) worrying sign if I were invested in XLM right now and the response to > 50% of the supply evaporating right now is rather lackluster. Still, give it a few more days, but so far I am not impressed at all. The burn certainly did not double XLM's value, which could be explained as a failure, or even as XLM being overvalued right now. 

If Ripple would do the same it would amount to saying 'the market does not want to buy our XRP' and that is not good for confidence at all. It will bring short term relief for XRP investors alright, but I also think it would be highly negative - if not destructive - longer term.  Such a move will always be explained as a desperate one.  In that sense I also wholeheartedly agree with Uloveme above. 

Edited by Parabellum

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2 hours ago, Uloveme said:

I already expected this question being asked once I saw the news from XLM and showing a (probably) short-term price increase. The increase in price however is nowhere near high enough to compensate the amount burnt.

To me this only shows how weak the currency is, with not enough demand to justify the supply. If Ripple would do the same it would also show weakness in my opinion.

I think this was a terrible idea. That basically signals that Stellar does not feel there is enough demand for XLM, now nor in the future, and thus have decided to burn a very large amount of it.

If Ripple did this, that would be a red alert.

XLM is obviously dooing poorly compared to XRP because it used to be about 50% of XRP price and has since strugled to maintin 33% of XRP price.

Now if they turn around and decide they need more XLM, what do they do? Turn inflation back on? Unlock all of those XLM that they sent to that "black hole" address??

I prefer Ripple's approach (perhaps I am bias) of reducing their sales.

If Ripple were to do anything, then I would want them to stop their sales 100% for the time being, but not "burn" any XRP. Given the supply is fixed, and the plan that they have, I would imagine we will need most of the 100 Billion XRP at some point.

If XRP is ever used on the scale that Ripple and many of us hope, then you will need all of that XRP because millions of XRP are going to be lost due to wallet mistakes, dead people, lost keys, large long term holders, etc.

Edited by AlejoMoreno

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2 hours ago, Uloveme said:

To the fed? No thanks, no one wants that. IMF/The World Bank sure, also makes a lot more sense.

In order for xrp to become the global reserve digital currency, Fed needs to hold xrp as well.

The interest rate is heading to zero.  Fed needs a new vehicle to drive the economy. It is a good timing for ripple  to give offer. 

 

Edited by quan

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6 hours ago, Montoya said:

It would possibly be a criminal act for Ripple to do this as it would violate their fiduciary responsibility to shareholders. It is mathematically not in their interest to do so. They would be losing more in market cap than they would stand to gain in any increased value. It would essentially be a wealth transfer from Ripple to other XRP holders.

@JoelKatz Finally ‘we the XRP holders’ can be incentivised.:good: Have been waiting for more than 2 years for this to happen. To burn 50 Billion XRP seems a bit ‘out of ratio’ to the Stellar Lumens burn. But to burn approximately half of the escrow would be ‘in ratio’ to the Stellar burn.... Just a :wink:.

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43 minutes ago, quan said:

In order for xrp to become the global reserve digital currency, Fed needs to hold xrp as well.

The interest rate is heading to zero.  Fed needs a new vehicle to drive the economy. It is a good timing for ripple  to give offer. 

 

Excellent idea. But hasn’t BG already said that Ripple does not own all of the escrowed XRP and that they where ‘holding it’.... Could be that I heared it wrong..... but in one of his recent interviews he was specifically talking about ‘holding’ and not about ‘owning’ the escrowed XRP..... It is all a word game so listen and read between the lines. XRP is (the only) supra national digital currency’ according to the world bank..... would it be wise to destroy it..... nahhhh better not.

Edited by cryptoxrp

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3 hours ago, Xrylite said:

These are the statements that keep needing to be reiterated every time this topic comes up. Anything that removes circulating supply will yield a price increase as a whole. However, it is impossible for someone to remove their crypto from the supply, but also come out profitable.

 

Imagine the following scenario where Stellar Foundation owns 80B XLM, while you own 20B XLM:


+--------------------+--------------+--------------+-------------+
| Who                | Supply Owned | Market Value | Net Value   |
+--------------------+--------------+--------------+-------------+
| Stellar Foundation | 80B XLM      | $0.08 USD    | $6.4B USD   |
+--------------------+--------------+--------------+-------------+
| You                | 20B XLM      | $0.08 USD    | $1.6B USD   |
+--------------------+--------------+--------------+-------------+

 

If Stellar decided to remove 50% of the total supply, then, to maintain the same market cap, the value of XLM should go up by 100%. Obviously this didn't happen and part of that reason is that not all the supply was in circulation, but this is all hypothetical to show the math behind why this is unreasonable. Assuming that they committed to remove 50B of their XLM so that the total supply goes from 100B to 50B. We get left with this:


+--------------------+--------------+--------------+-------------+
| Who                | Supply Owned | Market Value | Net Value   |
+--------------------+--------------+--------------+-------------+
| Stellar Foundation | 30B XLM      | $0.16 USD    | $4.8B USD   |
+--------------------+--------------+--------------+-------------+
| You                | 20B XLM      | $0.16 USD    | $3.2B USD   |
+--------------------+--------------+--------------+-------------+

This yields them a net loss of $1.6B USD, while you have a net gain of $1.6B USD. This is because they own proportionally less of the total market cap than they did pre-burn. The only scenario that would be fair to everyone (and to maintain net value) is to proportionally burn the 50B in total from everyone. In this case, they'd burn 40B, while you burn 10B. Sadly though, this does absolutely nothing to increase the value of the crypto.

Why would MC be maintained? MC does not represent the value that has been put in, that somehow moves over to the remaining coins? Therefore with 50% burnt I would find it more logical that MC would go to 50%.

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9 hours ago, baggy23 said:

I'd just like to hear opinions on this.

Is it possible that Ripple will do something simmilar to what Stellar did?

 

Why should Ripple give up half its XRP just to artificially and temporarily increase the price? 

Will you give up your half?

XRP would be another XLM **** if it wasn't for Ripples investment back into the ecosystem. Should be thanking them.

 

 

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