Ripple's XRP Sales Seen as Necessary for Ecosystem Growth, Says Community Pundit

An XRP community pundit has suggested that Ripple deciding not to sell their XRP holdings to fund ecosystem growth would be concerning.

Notably, Ripple has sold over 42 billion XRP since 2012, when it received 80% of the token’s total supply. While these persistent sales have triggered concerns among some community members, one pundit believes it would be more concerning if the company simply sat on its XRP bag and not use it to fund ecosystem growth.

• Ripple received 80 billion XRP in 2012 and has since sold more than 42 billion tokens, currently holding a balance of 37.685 billion XRP.
• These sales have often triggered concerns within the community, as some insist they could be adding to selling pressure.
• One community pundit believes the sales are necessary, and it would be more concerning if Ripple chose not to reduce its XRP holdings to fund ecosystem growth.
• Ripple has leveraged the money from its XRP sales to fund acquisitions and build institutional products around XRP.
• David Schwartz, former Ripple CTO, also suggested that Ripple’s primary aim is to reduce its XRP holdings as quickly as possible.

The recent commentary came from “XRP Nurse,” a vocal but pseudonymous XRP community figure, amid the concerns surrounding Ripple’s XRP sales. For context, Ripple received 80 billion XRP out of the asset’s total 100 billion token supply in 2012.

Since then, the company has sold 42.32 billion tokens and now holds about 37.685 billion XRP, according to a recent report from The Crypto Basic. Many of those sales come from the escrow system Ripple introduced in 2017, which releases tokens on a fixed monthly schedule.

While critics say these releases put pressure on the market and hurt smaller investors, “XRP Nurse” recently suggested people should worry more if Ripple stopped selling XRP than if it continued.

He explained that Ripple depends on those sales to fund growth and build the infrastructure necessary for wider adoption.“If Ripple wasn’t selling some XRP to fund ecosystem growth and infrastructure, that would actually be concerning,” the pundit argued.

XRP Nurse pointed out that Ripple does not simply release tokens without following a structure. Specifically, the escrow unlocks 1 billion XRP each month, and the company sells around 300 million, while locking back up 700 million tokens.

According to the community commentator, those sales make up only a small portion of the total XRP trading volume worldwide. Market data confirms this statement, as Ripple’s 300 million XRP sale every month only accounts for 0.25% of XRP’s average monthly trading volume.

The pundit added that the money helps Ripple grow enterprise partnerships, invest in the ecosystem, and improve liquidity. It also helps with the expansion of payment corridors.

XRP Nurse called Ripple a company building payment rails for a new financial system. The commentator suggested long-term holders should focus on whether Ripple builds something strong enough to outweigh any selling pressure.

Ripple executives have also explained why the company continues to sell XRP. In January 2024, David Schwartz, who served as Ripple’s CTO at the time, said the company faces only two realistic options for its large holdings.

It can either keep the tokens, which would keep raising concerns that one organization controls too much of the supply, or sell them gradually to reduce its share. Schwartz said Ripple intends to reduce its holdings as quickly as possible and does not see any workable third option.

Some community members suggested distributing the tokens for free instead of selling them. In response, Schwartz confirmed that Ripple had already tried that approach in the past and found that it did not produce the desired results.

Others proposed burning tokens to shrink supply and support price growth, but Schwartz argued that such an option would also not work out well. He said destroying tokens would simply erase value and would not influence price movement in a meaningful way.

To support this view, Schwartz pointed to an earlier event involving Stellar. In November 2019, Stellar burned 55 billion XLM tokens. However, this move did not impact the asset’s price in any positive way.