Does XRP burn coins? – Daily Burn Rate for XRP

The XRP burning rate as of 29th October 2022 was about four tokens per minute, which adds up to about 2.1 million coins annually. As adoption increases, this rate is expected to rise to as high as 100 XRPs per minute, which will accumulate to a total of 52 million coins every year. The number of annually destroyed tokens may seem high, but our calculation shows that it would take about 50,000 years for the current supply to be depleted, including the one in escrow. On the other hand, if adoption rose significantly, causing the burn rate to get out of hand, Ripple community members can vote to have changes made that would either lower the rate or introduce an alternative system of keeping the network agile.

The company CTO, David Schwartz, hinted in a Tweet that the community could vote for a change of system requiring the burning of all the 45+ billion coins the network hold in escrow. This was after the tech firm, which owns 50% of the total supply, came under fire for selling out part of the tokens. Since the community manages the network, there is nothing Ripple can do if such a vote is made successfully.

Despite the name, no actual XRP burning happens. The term is coined from the fact that tokens are rendered useless after the process. For XRP burning to start, validators approve a certain amount of the crypto to be sent to burn addresses outside the network. A burn address is a digital crypto wallet with no private key. So, once you send tokens to it, they can’t be accessed forever. For that reason, they are alternatively referred to as eater addresses. The tokens are hence permanently cast out of the total supply and can never be added back.

There is no guarantee that price will increase due to XRP burning. However, the coin’s use case is something to consider if you want to project its future price. The token is the only currency for fee payment on the Ripple network. It’s also the primary medium for exchanging and sending money. The company has already partnered with key financial players, including Bank of America, SBI Holdings, MoneyGram, and the National Bank of Fujairah. As the only viable competitor for the SWIFT international payment network, it goes without saying that if the demand for the token rises, its price will appreciate in the same proportion. The only hurdle the company faces is the SEC lawsuit, where the commission accuses Ripple of illegally selling XRP as a non-registered security. Without the case, expect XRP to rise to as high as $14 by 2030.