In a recent Twitter exchange surrounding Ripple's impact on the price of XRP, former Director of Developer Relations at Ripple Matt Hamilton shared insightful perspectives on the matter. While engaging in a lively debate, Hamilton emphasized key aspects that shed light on the relationship between Ripple's holdings and the price fluctuations of XRP.
Hamilton pointed out that Ripple is indeed the largest holder of XRP, possessing approximately 48 billion tokens. However, he highlighted that the majority of these holdings are kept in escrow contracts. These contracts release a portion of the XRP monthly, with Ripple only selling a small fraction and reinvesting the remainder into new escrow contracts.
As for influencing price, the totally daily sales volume globally of XRP is about 4B XRP, so Ripple's holdings are pretty small in comparison. The price of XRP mostly follows the test of the market and mostly follows BTC.— Matt Hamilton (@HammerToe) July 16, 2023
Consequently, Hamilton argued that Ripple's influence on the market is relatively limited considering the global daily sales volume of XRP, which stands at around 4 billion tokens.
The developer then shed light on the underlying dynamics that really drive the price of XRP. He emphasized that market forces and the performance of Bitcoin (BTC) largely dictate XRP's price movements.
In case of community offense: Burn
Furthermore, Hamilton clarified that neither XRP nor XRPL is under Ripple's control. To emphasize this point, he suggested that if the community deemed it necessary, all of Ripple's holdings in XRP could be burned.
In response to concerns about Ripple's significant ownership of the token, Hamilton reassured that this should not be seen as a worrying factor for the future. He explained that since Ripple operates just one validator, the community holds the power to vote for an amendment that would effectively "burn" the company's holdings if they acted against the community's interests.