- David Schwartz revealed his initial opposition to the preprogrammed XRP escrow on the XRPL.
- The CTO of Ripple said he didn’t see the mechanics creating significant upside for the token’s value.
- Along the way, he shut down the FUD claiming that the escrow is affecting the price of XRP.
Ripple’s XRP escrow is a hotly debated topic and a common source of FUD (Fear, Uncertainty, Doubt) within the crypto community. The company’s CTO, David Schwartz, has always been vocal about his thoughts on the subject.
Recently, the Ripple official revealed that he initially opposed the decision to implement this measure.
Ripple’s XRP Escrow Strategy
For context, Ripple has locked a significant portion of the XRP supply in a programmable escrow mechanism within the XRP Ledger (XRPL). It initially locked 55 billion tokens out of its 100 billion supply cap.
XRPL unlocks a billion escrowed tokens per month and will continue to do so until the entire locked supply is in circulation. The company explained that the measure aims to provide transparency and predictability to the XRP economy.
Schwartz Reveals Earlier Opposition on the XRP Escrow
Schwartz, one of the architects of the XRPL, released the statement in a thread on X after a user criticized him for implementing the Ripple escrow to sell 1 billion XRP per month to fund his career. The CTO responded that he previously gone against the idea.
“Before the escrow, Ripple could have sold as much XRP as it wanted every month,” said Schwartz. “And I opposed the decision to implement the escrow precisely because I didn’t see enough upside to justify giving up that flexibility.”
Schwartz clearly grounded his opposition in prioritizing operational flexibility over predictability benefits. He believed that without such a restriction, Ripple could sell an uncapped supply to fund its untethered growth.
On the other hand, Ripple’s senior executive didn’t see the potential of a significant uptrend in XRP’s value with the enforcement of the escrow.
Effect of Token Unlocks on XRP Economy
In another post in the same thread, Schwartz shut down claims that XRP’s price would have been higher now if Ripple hadn’t flooded the market with a billion supply of the token monthly. He acknowledged that such an assumption is based on common sense, but the evidence based on trends does not reflect that conclusion.
The CTO illustrated how XRP correlates to Solana (SOL) to drive his point. His chart shows the tokens’ prices moving in tandem during market swings, aligning with Macroaxis’ strong 0.95 three-month correlation between the assets. The latter indicates very low diversification between XRP and SOL, as they tend to move in step with each other.
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