XRP News Today: XRP's Minimal Burns Leave Investors Questioning Its Deflationary Edge

XRP’s tokenomics appear to limit its appeal as a deflationary asset, largely due to the negligible burn rate associated with the token. Unlike other cryptocurrencies such as Ethereum and Shiba Inu, which have well-documented burn mechanisms designed to reduce supply and influence investor sentiment, XRP’s burn process is minimal and primarily a byproduct of network activity. This has sparked questions among investors about whether XRP can achieve the same level of deflationary appeal as its counterparts [1].

The burning mechanism of XRP is intrinsically tied to the transaction fees on the XRP Ledger. Unlike the protocol-driven burns seen in Ethereum or the community-led initiatives common in Shiba Inu, XRP burns occur only when transactions are processed, with only a small amount of XRP removed from circulation each time [1]. While this does serve a functional purpose—preventing spam and ensuring network efficiency—the rate at which tokens are burned is far too low to create any meaningful deflationary impact given the token’s total supply of nearly 100 billion [1].

This operational model reflects XRP’s functional rather than marketing-oriented approach. The token was designed for speed, efficiency, and utility in cross-border payments rather than for deflationary incentives [1]. Consequently, the absence of high-profile burn campaigns or token reduction strategies contributes to the perception that XRP is not being actively managed to reduce supply or increase scarcity in the same way as other leading cryptocurrencies.

Despite the lack of deflationary mechanics, XRP has maintained a steady presence in the market. It is currently trading near $2.85, with investors closely watching key technical levels [1]. Short-term performance suggests that the price may consolidate near the 100-day exponential moving average before either advancing toward $3 or retreating toward $2.5 [1]. Factors influencing XRP’s price include real-world utility, regulatory developments, and the adoption of its payments network [1].

Looking at broader market dynamics, XRP is gaining traction as a settlement-layer asset in global financial institutions. Ripple’s On-Demand Liquidity system is being adopted by new Middle Eastern banks, enabling faster cross-border transactions [2]. Additionally, the token is being explored for use in asset tokenization, such as the recent initiative in the United Arab Emirates to tokenize Dubai property deeds [2]. These developments highlight XRP’s growing role beyond mere payments, potentially increasing its structural demand in the long term.

The market cap of XRP currently stands at $191 billion, and the token is viewed by some analysts as having a higher likelihood of doubling in value compared to Shiba Inu, largely due to its institutional adoption and functional use cases [2]. While Shiba Inu relies more on speculative enthusiasm and retail demand, XRP’s growth is being driven by tangible infrastructure and real-world applications [2].

In summary, while XRP may lack the deflationary mechanics that drive demand in other tokens, its value proposition lies in its utility and growing institutional adoption. The token’s role in global payments and asset tokenization could offer long-term growth potential, even if its tokenomics do not support significant supply reduction.

Source:

[1] "XRP Burns at Zero? Here's Why No One Burns It" (https://u.today/xrp-burns-at-zero-heres-why-no-one-burns-it)

[2] "Which Will Double Faster? XRP (Ripple) vs. Shiba Inu" (https://www.aol.com/double-faster-xrp-ripple-vs-080100594.html)