In a recent development, influencer WrathofKahneman (WoK) caught the attention of the XRP community by discussing the impact of XRP burns on the cryptocurrency’s price in relation to XAH minting. The emergence of Xahau, chain based on the XRP Ledger, allows users to create XAH tokens by converting XRP into ashes.
Let’s now understand the specifics of this intriguing development.
XAH Minting with XRP
Bitrue, an active exchange, has introduced a seven-day program that lets XRP investors create XAH tokens using their XRP holdings. Users participating in this program will receive an equivalent amount of XAH tokens in return for converting their XRP into XAH tokens during the specified period.
With the increasing popularity of XAH minting, questions have arisen within the XRP community about its potential impact on XRP. The community is particularly curious about the rate at which XRP is used to create XAH tokens during the minting process. This curiosity arises from the belief that reducing the number of circulating tokens can potentially increase their value.
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Wok’s Insights
WoK’s perspective is that burning XRP has a minimal effect on its price. He argues that the amount of XRP burned is so small, especially in the early stages, that it has very little impact on its market value.
In his response, WoK explains, “Theoretically, it reduces the supply of XRP and should push the price up. But in reality, it requires so little XRP, especially at first, that I don’t think it does much of anything.”
WoK reinforces his viewpoint by sharing data from XRPScan. According to the data he provided, out of the 99.98 billion XRP tokens, approximately 11.7 million have been burned within the XRP Ledger. It’s important to note that, unlike some other cryptocurrency projects, the main purpose of the XRP Ledger’s burning mechanism is to address the risks associated with network spam transactions.
Nevertheless, an unintended consequence of this mechanism is the gradual reduction of the XRP supply.
Understanding XRP’s Price Dynamics
While the XRP community remains captivated by the mechanisms of XRP burns and XAH minting, WoK’s insights suggest that the impact on XRP’s price may be modest due to the relatively small amount of XRP being burned.
This discussion sheds light on a captivating aspect of the cryptocurrency world and highlights the distinctive approach of the XRP Ledger in addressing network challenges while unintentionally affecting supply dynamics.
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Do you agree with WoK’s assessment?
Read More: XRP Burns for XAH Minting: How Will It Impact the Token Price?