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- The recent discussion surrounding the gambling nature of XRP has been “put to bed” by the CTO, David Schwartz.
- While he admits that XRP is just like any other crypto and should not be regarded as a lottery ticket, he believes that there could be a large increase.
With Bitcoin price surging to new heights in the pre-halving rally, Ripple’s XRP has barely recorded any significant appreciation as market data shows a weekly decline of 5%, trading at $0.60. Interestingly, this is an unexpected decline from the $0.65 mark reported by Crypto News Flash a few days ago.
To many, accumulating this digital asset is nothing less than a gamble. Its return to the top since the commencement of its legal showdown with the US Securities and Exchange Commission (SEC) has become a huge task, leaving investors with frustrations. Regardless, others remain hopeful and consider it as a lottery ticket that could record a significant financial windfall.
Speaking on this, the Chief Technology Officer (CTO) at Ripple David Schwartz clarified that XRP is just like any other crypto rather than a lottery ticket. However, he admitted there could be a chance of a sudden large increase.
I think of it, like most cryptos, as an asset with high volatility that holders hope trends upwards over time. I don’t think of it as much as a lottery ticket with a chance of a sudden large increase, though there’s certainly some truth to that.
Is the XRPL AMM Activation a Source of Passive Income?
The XRP community has also been confronted with discussions surrounding the passive income potential of the recent XRP Ledger (XRPL) Automated Market Maker (AMM) activation. To clarify this, an X page explained that most of these posts are meant to take advantage of the inexperienced XRP community members.
Drawing insight from the post, XRP AMM does not provide income for holding the asset. Instead, holders would have to provide liquidity and interact with it. Expanding further on this, giving XRP or any issued token to the AMM makes it available for purchase or sold by swappers.
Commenting on this post, a user identified as “ShitCoinMillionaire” asked if this does not still qualify it to be called a passive income. Schwartz, who seemed to have given an affirmative answer, also explained that the mode of operation is quite different from staking.
Yes, but the mechanic is different from things like staking. To get passive income from XRP with the AMM, you have to trade your XRP for claims against the AMM pools. While they hold XRP and you can reclaim XRP on demand, you are not guaranteed to get as much out as you put in.
Growing Concerns of the XRP Escrows
There have also been growing concerns about the periodic release of XRP from escrow accounts on the first of each month. This programmatic sale has triggered allegations of price manipulation, forcing the enthusiasts to call for the burning of XRP escrows. Currently, more than 40.708 billion XRP are held in escrow accounts.
This was reacted by Schwartz who explained the ability to burn escrows by “blackholing.” According to him, Ripple can make a unilateral decision to prevent XRPs in these escrow accounts from entering circulation by simply rendering them inaccessible. However, Schwartz did not disclose whether Ripple would take this decision or not.
A comprehensive discussion on the XRP escrow recently happened between Black Swan Capitalist founder Versan Aljarrah and Edward Farina, Head of Social Adoption for XRP Healthcare. This was highlighted by Crypto News Flash.
As of press time, the market cap of XRP had declined by 2.6% to reach $33.28 billion. In addition to that, the asset was down by 3.5% from year-to-date.
