It’s possible that Coinbase Exchange is burning XRP, which would be the most understated or strange action ever. A percentage of the fees that the American trading platform receives from each internal XRP transfer are burned, according to information disclosed by block explorer XRPScan.
XRP burn – unusual bullish effort
Recently, Coinbase relisted XRP after Judge Analisa Torres clarified that the cryptocurrency is not an investment contract. According to XRPScan’s update, Coinbase charges 20 XRP in fees for any internal fund transfers.
Although the purpose of this burning is difficult to foresee, XRPScan observed that it is presumably done to empty the wallets involved in the transfer. Since the wallet reserve payments were reduced to 10 XRP a few years ago, Coinbase is overpaying for petrol fees.
https://x.com/xrpscan/status/1798587803456143405
The discovery of 39,401,162 XRP worth $20,712,323 that was moved from an unidentified wallet to Coinbase provided XRPScan with its insight. Since the prepayment for petrol fees benefits the coin more than the trading platform, the community is responding to this unexpected Coinbase action.
According to Thomas Silkjaer, Head of Analytics and Compliance at XRP Ledger Foundation, in order to further reduce transaction costs, the trading platform might have simply erased related wallets.
XRP competing as viable payment option
Based on the current price of the currency, which is fixed at $0.5234, this translates to around $10.468 when actual figures are placed on the top end of the 20 XRP that Coinbase pays.
When compared to the price of dealing on competing protocols, this sum is rather large. But XRP has made a name for itself for smaller, retail transactions; in fact, its usefulness forms the foundation of its defence against the case brought by the US Securities and Exchange Commission (SEC) against it.
XRP continues to be ranked among the top cryptocurrency payment currencies in the market by a significant margin.
