Block Digital's co-founder and head of research and development made statements about Ripple's stake in XRP.
In a new interview with Real Vision, Santiago Velez addresses the controversial question of whether Ripple owning more than half of the total supply of XRP will help or prevent the third largest cryptocurrency to grow by market cap.
Velez says Ripple's assets pose a risk, and that Bitcoin faces a similar problem with whales that might decide to sell large amounts of BTC on the open market. Velez states that traditional investors are also facing such a risk. He agrees, for example, that Amazon investors knew that one day Bezos might decide to sell AMZN shares and launch the surplus supply:
“There are many criticisms of Ripple at the company. They are the biggest owner of XRP, the biggest criticism is in this direction. They represent the enormous counterparty risk that can come into the market and you, as a token investor, are basically subject to this huge shift. The difference between Amazon shareholders is that they can create new shares, share stocks, things like that. However, you cannot do this with the known total supply. Really, all you can do is play inside 99 or 100 billion XRP. This is your maximum allowance. "
Praises Ripple's Transparency
Velez praises Ripple's transparency in XRP assets and says it is one of the most transparent companies in crypto:
“For me, XRP is one of the most transparent ecosystems. There is the fact that Ripple communicated this to the community. They don't have to do this. They had no obligation to put XRP into these Escrow contracts but they did anyway and report exactly how much they gave, how much they sold. This is another important transparency. They report exactly how much they sell. "
Ultimately, Velez says, XRP's value proposition is very different from Bitcoin. Rather than being an alternative store of value to gold, he says, the growth of XRP will depend on its benefit in the payments world.
For example, XRP-based remittance platform On-Demand Liquidity provides an example of how XRP can give financial institutions a way to quickly transfer money to global markets without the need to hold various currencies. This is important for the value of XRP and Ripple.
