Ripple CTO, David Schwartz, has recently shared his opinion on how Ripple, the San Francisco based cross-border payment firm, could have handled the behemoth amount of XRP in its possession.
Schwartz shared this while responding to a crypto enthusiast that believes Ripple’s biggest sin was the usual way it’s been managing its XRP holdings. Recall that over 50% of XRP in circulation belongs to the payment firm.
Ripple’s Early Attempts to Give Away XRP Caused Huge Collateral Damage
According to Schwartz, Ripple had once attempted to give away XRP but resulted in huge collateral damage. He thereby solicited the opinion of his teeming followers regarding what the payment firm could have done in such a situation.
“What do you think we should have done? As soon as there was a market price, giveaways stopped working…
At first, we were giving it away. Everyone who wanted it was using it. But once it had a market price, giveaways were just gamed by people who immediately sold and they caused huge collateral damage.”
Risk in Committing Its Massive Holdings to the Development of XRP Ledger
Schwartz quantified the amount of risk in committing the massive XRP holdings directly to the development of XRP Ledger when he was asked a related question.
“At that time, we would have had no idea what to commit it to. You’re imagining we somehow commit to unchangeable rules very early, taking the risk we guess wrong.”
David Schwartz’s Opinion on How Ripple Managed Its Massive XRP Holdings
Sharing his opinion on how Ripple has so far managed its huge XRP holdings, David Schwartz said he thinks the cross-border payment company did a good but imperfect job:
“I think we faced some unprecedented challenges and did a good job overall. Not perfect. I don’t think making big irrevocable commitments earlier would be helped and it definitely didn’t seem prudent at the time.
“The biggest problem was that we didn’t want to hold XRP forever, but giving it away became impossible. It was a bizarre challenge. Lock ups don’t work too well either.”
It can be recalled that Ripple’s mode of managing its huge XRP holdings is the major reason for the lawsuit filed by the United States Securities and Exchange Commission (SEC) against the firm and its top executives.