- Ripple CTO David Schwartz is in support of Xahau’s Burn2Mint feature.
- He believes this feature can generate demand for XRP, boosting its price eventually.
David Schwartz, Ripple’s Chief Technology Officer (CTO) and one of XRPL’s original architects has publicly endorsed Xahau’s Burn2Mint approach, admitting that it could be a source of demand for XRP despite concerns among some users.
The Ripple CTO Support Basis
Xahau, created by XRPL Labs, the team behind Xumm, emerged as a promising project within the XRPL ecosystem. This sidechain introduces its native token, XAH, and advocates for early access to Hooks, enabling the development of smart contracts. However, it’s the Burn2Mint concept that has piqued the interest of the crypto community.
Burn2Mint, as the name suggests, involves burning or permanently locking up XRP tokens in exchange for XAH tokens. This process is irreversible, meaning that the XRP tokens used in the exchange are gone for good.
In his public statement on X, Schwartz emphasized the rationale and benefits of Burn2Mint. He clarified that Burn2Mint is not the primary method for acquiring XAH. The main sources for acquiring XAH will include airdrops, rewards for mints, initial grants, and support from both centralized and decentralized exchanges. Burn2Mint, according to Schwartz, is a contingency option designed to allow XRP holders to obtain XAH in a decentralized and secure manner.
One of the key arguments in favor of Burn2Mint is that it establishes a minimum price for XAH. By burning XRP, users create a demand for XRP and ensure that they don’t end up paying more for XAH than they would have paid for the XRP they burned. This mechanism helps maintain a stable ecosystem for XAH.
Another crucial point Schwartz highlighted is that XRP holders who may be hesitant to commit their tokens to acquire XAH need not worry. If Burn2Mint remains unused, it will not affect them. However, if implemented, it will reduce the supply of XRP, potentially creating a demand for it, which could ultimately benefit these holders in terms of price gains.
Xahau’s Burn2Mint approach is particularly interesting because it presents an alternative to the conventional two-way bridge solution. A two-way bridge would require a custodian entity to hold bridged assets on the XRPL, introducing technical and legal complexities and associated risks. Burn2Mint circumvents these complications, offering a more streamlined and secure way to access XAH.
Concerns and Criticism
However, it’s worth noting that not everyone in the crypto community is enthusiastic about Burn2Mint. Some, like Krippenreiter, a prominent community figure, predict that only a small portion of the XRP supply will be burned to acquire XAH.
According to him, ordinary users and investors may not have a strong incentive to utilize Burn2Mint and might prefer trading XRP on centralized or decentralized exchanges instead.
In light of these perspectives, it’s fascinating to observe the initial uptake of Burn2Mint. Recent data from onledger.net shows that on November 1, 44,742 XRP were burned, which represents only a tiny fraction of the total XRP supply. However, there have been notable individual transactions, such as one user burning 40,000 XRP in a single transaction, presumably to acquire XAH.
