A community member believes a fee increase could help catapult the price of XRP.
Ripple Chief Technology Officer David Schwartz has lent his opinion to a suggestion to raise the cost of transaction fees on the XRP Ledger to reflect the value of transactions and boost the XRP price.
In a series of tweets yesterday, Schwartz gave his opinion while explaining his stance. Schwartz noted that though he responded in the affirmative to the poll, he did not believe that transaction fees should be utilized to manipulate the price of XRP artificially. However, he conceded that transaction costs needed to reflect the actual cost it imposes on the network for more efficient resource allocation.
Furthermore, Schwartz disclosed that he did not want the network to lose its edge as a low-cost, high-speed transaction blockchain. Nonetheless, he asserted that he did not also want node operators subsidizing transaction fees.
“My thinking is that if the txn fee is less than the actual cost of a txn, then we’ll be destroying value by executing txns and discouraging people from running nodes,” Schwartz surmised. “Whereas if the fee is more than the cost, we’re adding needless friction.”
My thinking is that if the txn fee is less than the actual cost of a txn, then we'll be destroying value by executing txns and discouraging people from running nodes. Whereas if the fee is more than the cost, we're adding needless friction.
— David "JoelKatz" Schwartz (@JoelKatz) March 5, 2023
The XRPL is favored in payments due to its cheap and fast transactions. The average transaction on the network costs less than $0.01, taking 3 to 5 seconds to complete.
Despite these advantages over other leading blockchain networks like Bitcoin and Ethereum, the price of XRP has languished, with its all-time high formed in 2018, compared to other leading assets that reached New highs in 2021. While most have attributed this to the uncertainty surrounding the token in the United States due to the Securities and Exchange Commission’s case against Ripple, alleging XRP to be an unregistered security, others have also questioned the network’s value proposition.
The cryptocurrency trades for $0.364, down 2.51% in the last 24 hours at press time. XRP permabulls have asserted that the asset will kick off a new bull market phase this year.