Artur Kirjakulov, the CEO of XPMarket.com, has argued that new tokens and the expansion of the XRP Ledger (XRPL) effectively benefit XRP value.
Recently, the XPMarket CEO observed misconceptions circulating in the XRP community regarding the potential impact of new tokens and the expansion of XRPL’s ecosystem on XRP’s value.
Kirjakulov firmly disagreed with the view that a larger XRPL ecosystem would negatively impact XRP. According to him, the development of XRPL’s ecosystem will have a direct positive impact on XRP. He further presented numerical data to counter the misconception.
There’s a common misbelief in the #XRP community that new tokens and expansion of the #XRPL ecosystem might hurt $XRP value by draining the liquidity out of it. I don't agree with that, I believe that the development of XRPL's ecosystem will have a direct positive impact. Let me… pic.twitter.com/Ak9tXohtDC
— Artur (@Kirjakulov) April 3, 2024
The Benefits of a Larger Ecosystem
Kirjakulov pointed out that over 5 million wallets are on XRPL, each requiring 10 XRP to initiate. Accordingly, 50 million XRP are inactive. He underscored that the increase in wallets signifies an increasing demand for XRP.
Drawing an analogy, Kirjakulov likened the XRPL ecosystem to an expanding and enriching party. He explained that the growing number of participants necessitates more XRP for admission, akin to a mandatory fee, which inherently reflects a natural demand for the digital asset.
Furthermore, Kirjakulov examined the advantages of a burgeoning ecosystem through the lens of trust lines. He pointed out that nearly 7.4 million trust lines have been established on XRPL, each with a nominal 2 XRP. This implies that 14.8 million XRP remains unutilized.
The essence is that a blooming ecosystem needs more trust lines; with it, more XRP tokens take a temporary leave of absence from the market.
Demand Through Trading and AMM
Additionally, the XPMarket CEO proved his point in the context of trading on the decentralized exchange (DEX), where each limit order requires 2 XRP to be reserved. He likened this process to individuals saving coins for a rainy day.
Kirjakulov cited statistics from the previous month, revealing over 740,000 trades executed by more than 39,000 traders. He encouraged community members to reflect on the substantial amount of XRP sidelined due to these transactions.
To further illustrate his view, he hinted that market participants locked over 500,000 XRP in liquidity pools as XRPL’s automated market maker functionality launched last month.
XRP Demand from NFTs
Moreover, Kirjakulov underscored the advantages of a growing XRPL ecosystem in the context of NFT. He pointed out that XRPL locks up to 32 XRP to conserve space for NFT storage. As individuals require additional room for new NFTs, the demand for XRP increases.
Kirjakulov emphasized that large NFT collectors are not merely engaging in transactions involving digital images but also demanding XRP for storage purposes.
The central argument is that projects, including meme coins, contribute to the value of XRP by creating numerous channels that necessitate its use, such as active wallets, trust lines, trading, and NFTs. Kirjakulov urged the community to contemplate a scenario where the ecosystem expands tenfold.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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