Top Validator Addresses XRP Supply Shock Concerns, Citing 16B XRP on Exchanges

Vet, a validator within the XRPL (XRP Ledger) dUNL, has dismissed concerns regarding a potential supply shock of XRP, noting that exchanges currently hold approximately 16 billion XRP. He argues that the existing market conditions do not support the claims of a supply shock scenario.

Key Takeaways

XRP Holdings on Exchanges: Exchanges maintain about 16 billion XRP readily available for trading.
Immediate Transfer Capability: Users can quickly transfer XRP to exchanges, preventing a prolonged supply shortage.
Market Liquidity: Order books fluctuate rapidly based on market activities, impacting liquidity rather than remaining static.
Disputed Figures: Zach Rector, a notable XRP community member, questions the accuracy of Vet's data and references Evernorth's XRP holdings as a potential discrepancy.
Verifiable Data: Official blockchain data, such as that from XRPScan, shows significant XRP holdings at major exchanges.

XRP Supply Shock Concerns

Main Content

Veteran validator Vet of the XRPL dUNL has refuted the theory of an XRP supply shock, emphasizing that exchanges hold substantial amounts of XRP, and the current market conditions do not align with claims of a scarcity crisis.

Advocates for the supply shock theory often point to decreasing XRP reserves on major exchanges like Binance, arguing that a decline in the token's availability could restrict liquidity, leading to price increases. However, Vet counters these assertions with on-chain analytics.

Significant XRP Holdings in Exchanges

Current estimates indicate that exchanges possess nearly 16 billion XRP accessible to traders, according to Vet. Moreover, holders storing XRP in self-custody wallets have the capability to transfer their tokens to trading platforms in as little as three to four seconds. This rapid transfer process ensures that supply is not significantly restricted for long durations.

Vet also addressed worries regarding insufficient order books, explaining that liquidity can vary dramatically and instantaneously. For instance, order books can either swell or shrink within seconds, depending on the dynamics of market activity.

It is important to note that price fluctuations do not follow predefined patterns; a mere $10 million purchase may drive prices up, while a $100 million buy order may not yield the same effect, potentially even causing a price drop.

Zach Rector, a prominent advocate for the supply shock narrative within the XRP community, has raised questions about the accuracy of Vet's data. He pointed to Evernorth, which supposedly controls around 86 million XRP, as raising concerns over exchange balance estimations.

In response, Vet clarified that his figures reflect the minimum amounts held on exchanges, implying that many exchanges manage numerous wallet addresses not publicly recognized. Therefore, actual exchange balances are likely higher than what on-chain data indicates.

Confirmation from XRPScan Data

Vet underscored Upbit as a prime example of exchange holdings, revealing that four XRP wallets associated with this exchange together contain around 2 billion XRP. This claim is bolstered by data from XRPScan, a blockchain explorer that shows Upbit maintains 12 wallets, each holding at least 1 million XRP, totaling approximately 6.256 billion XRP.

Furthermore, Binance and Binance.US collectively oversee 13 wallets with similar balances, which hold 2.5 billion XRP. Uphold also accounts for four wallets with at least 1 million XRP, summing up to 1.679 billion XRP. Altogether, these four exchanges dominate the market with a total of 10.435 billion XRP stored in wallets that meet the one million XRP threshold.

Through this analysis, it becomes evident that the supply of XRP remains robust on exchanges, alleviating fears of an impending supply shock in the market.