Ripple CTO Reveals Shocking Truth About XRP Burning Method!
In the ongoing discussion in the XRP community about XRP burning, what happens when a user moves trillions of RLUSD tokens on the XRP Ledger every day? If XRP gets burned when RLUSD is sent on XRP Ledger? Ripple's CTO, David Schwartz, quickly jumped in to provide a detailed explanation of how the XRP burning mechanism works and its impact on both XRP and RLUSD.
How to burn XRP
David Schwartz explained that the XRP burning mechanism is a unique feature of the XRP Ledger that helps keep the network secure and efficient. Every time a transaction is made, for XRP or RLUSD, a small fee is charged in XRP. This fee is not returned to the system; Instead, it is permanently removed or “burned” from circulation.
While the amount burned per transaction is very small, typically around 0.00001 XRP, the process still helps reduce the total supply of XRP over time.
According to Schwartz, the amount of XRP burned is likely to remain small even as transaction volume continues to increase. Although systems such as SWIFT, Visa and Mastercard, which handle billions of transactions every day, implement XRP burning, it is indicated that only 0.0075% of the total supply of XRP is held each year.
How payments work on the XRP Ledger
David Schwartz even explained how transaction fees work. Ripple's RLUSD, a stable coin built on the XRP Ledger, also follows a similar payment system. Although RLUSD is a separate asset, the transactions still burn XRP. This means that every time RLUSD is used, the total supply of XRP may decrease, but the impact will be minimal.
Fees may increase slightly when there is more activity, but this ensures spam transactions are caught, and important ones move faster.
Ripple plans for RLUSD
Meanwhile, Ripple is preparing to launch RLUSD soon, and it could play a major role in the stablecoins market, which is expected to grow to $2.3 trillion.
Meanwhile, the burning of XRP by RLUSD transactions may not significantly reduce the supply of XRP, but it will still have an ongoing, gradual effect. This, combined with the planned launch of RLUSD and its future use, will have long-term implications for the XRP Ledger economy.
