XRP, the native token of the XRPL protocol, has decreased its total supply. Over the past 30 days, roughly 247,016 XRP tokens have been permanently burned, reducing the total circulating supply.
This trend was first highlighted by an anonymous Twitter account, sparking a wave of speculation within the XRP community.
Neil Hartner, a senior staff software engineer at Ripple, was prompted to address the ongoing conjectures about this token burn. Hartner’s clarifications have provided the crypto community with insights into the internal workings of the XRP Ledger and the potential implications for its native token.
XRP Ledger Account Deletions – The Catalyst
Hartner revealed that this unexpected XRP burn was due to a series of accounts being removed from the XRP Ledger. Each deletion results in the burning of two XRP tokens, leading to a net decrease in the total XRP supply.
Specifically, the deletions have focused on dormant accounts that once held a balance of 20 XRP – the former account reserve amount.
This is mostly the result of XRPL account deletions. Each account deletion burns 2 XRP. In June 2023, Poloniex alone deleted 85,566 old XRPL accounts which burned 171,132 XRP. They have finished deleting accounts. https://t.co/07M1IpGkYw https://t.co/cA5mVUVbGR
— Neil Hartner (@illneil) July 5, 2023
Notably, this revelation has sparked a renewed interest in the underlying dynamics of the XRP Ledger network. It underscores how operational decisions like account deletions can ripple effect on the circulating supply of the native token, potentially influencing its value and market dynamics.
Poloniex’s Account Purge – A Major Contributor
It is worth noting that one of the significant events contributing to this considerable token burn was the actions of Poloniex. The crypto exchange reportedly deleted 85,566 outdated XRPL accounts in June 2023, burning 171,132 XRP tokens, as Hartner mentioned above.
This account purging process has now concluded, indicating that the account deletions and subsequent token burns might not continue at the same rate.
Meanwhile, despite XRP’s total supply plunge, the asset has been in a downward trend since the beginning of today. Particularly, over the past 24 hours, XRP has plunged 3% and currently trades at $0.47 at the time of writing. The XRP market cap has declined nearly 5% in the past two weeks.
The asset market cap value currently stands at $24.6 billion, a more than $1 billion drop from the valuation of $25.9 billion seen late last month. Interestingly, XRP’s daily trading volume has continuously increased over the past week.
The asset’s trading volume has surged from the $669 million seen last Wednesday to more than $800 million in the last 24 hours.
Featured image from Shutterstock, Chart from TradingView