David Schwartz, Ripple's former Chief Technology Officer, has pushed back against claims that the company's XRP sales hurt token holders. The debate flared after pro-crypto lawyer Bill Morgan noted Ripple no longer sells XRP directly to retail investors, a practice that had drawn criticism.
The Debate Over Ripple's Business Model
A Chainlink executive argued that Ripple monetizes its pre-mined XRP to fund operations, acquisitions, and shareholder returns, effectively shifting costs and risks to XRP holders. He also claimed that XRP has lost its role as a bridge asset, with stablecoins like Ripple's RLUSD taking over.
Schwartz's Counterargument
Schwartz dismissed these assertions, stating that negative outcomes for holders stem from investor sentiment, not Ripple's sales. He explained that if the market expects future XRP sales to depress prices, that expectation is already priced in, causing buyers to acquire XRP at lower levels and sell at correspondingly lower prices. Thus, he argued, the company's actions do not uniquely victimize holders.