The Ripple CTO David Schwartz has revealed that it is near impossible to avoid selling XRP amid increased scrutiny of Ripple’s XRP sales and the departure of an XRPL infrastructure provider.
Ripple has taken the spotlight for its XRP sales amid the latest development in the SEC vs. Ripple lawsuit. For context, the SEC’s opening remedies brief, filed this week, shows that the agency demands $2 billion in penalties against Ripple, noting the firm continued to sell XRP after Judge Torres’ ruling last July.
XRPL Loses Another Infrastructure Provider
While the broader XRP community has always known that Ripple continues to sell XRP, the SEC’s brief has increased attention on these sales, bolstering criticisms and commentaries. Amid the reception, Dev Null Productions, a software production agency, has decided to leave the XRPL ecosystem.
The team behind the agency released a statement on March 26, disclosing that their decision to leave the XRPL ecosystem is due to XRP sales from Ripple, which they believe are “at the expense of retail.” They also claimed the XRPL Foundation prioritized their personal objectives over the objective of the community.
Dev Null Productions is the second infrastructure provider to pivot from the XRPL within the past week, as XPUNKs, the XRPL’s pioneer NFT project, announced a move to Solana on March 20.
Ripple CTO Speaks for Ripple on XRP Sales
Responding to the Dev Null Productions’ disclosure, David Schwartz emphasized that it is almost impossible for Ripple to avoid selling their XRP. He cited an earlier remark from him in March 2021, in which he noted that, if Ripple gave him a bonus of 1 million XRP, he would need to quickly sell half of the bonus.
It's nearly impossible to avoid selling if you want to hold.https://t.co/1hILC94kb1
— David "JoelKatz" Schwartz (@JoelKatz) March 26, 2024
According to his earlier disclosure, this is due to his tax obligations for capital gains in the federal and state (California) setups, which amounts to 50% of income he earns. Citing this scenario, Schwartz stressed that distribution is difficult.
In his latest remarks, the Ripple CTO added that Ripple does not have another choice when it comes to their XRP holdings. Schwartz rightly stressed that the community persistently complains about the company’s extensive XRP holdings.
However, there are also complaints when the firm looks to reduce their holdings by selling the XRP tokens off. According to him, Ripple doesn’t have a lot of options. Schwartz has repeatedly emphasized that Ripple is always seeking ways to drastically reduce its XRP holdings, with sales being the primary way of doing this.
Also, there's really nothing else you can do. People complain the distribution is too concentrated and then they complain too much is being distributed. There just aren't a lot of other options.
— David "JoelKatz" Schwartz (@JoelKatz) March 26, 2024
When a community member suggested that the company put the XRP tokens in an XRPL AMM to bolster liquidity, Schwartz noted that such a move would result in single-sided deposits, as pumping more XRP tokens to the AMM without equal deposits of the other asset in the pool could lead to price impact.
Panos Mekras, co-founder of Anodos Finance, argued that Ripple should have enough funds to handle deposits of other assets as well as XRP in the AMM pools. He noted that if the company helped out in this way, they would assist with liquidity provision, bolstering participation.
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