Expert Says Ripple ODL Cannot Help XRP Price Grow: Here’s Why

Notable figures within the XRP group have engaged in intense debate in regards to the function of Ripple’s On-Demand Liquidity (now Ripple Funds) in propelling XRP’s market worth.

Ripple ODL Can’t Assist XRP Value Develop

Famend crypto creator Panos Mekras has asserted that Ripple’s XRP-based answer for cross-border fee options, regardless of how profitable, is not going to inherently affect the worth of XRP. Mekras argues that Ripple’s ODL is engineered to be demand-neutral.

He highlighted that ODL transactions primarily contain immediate shopping for and promoting of XRP, with no inherent demand for XRP originating from ODL itself.

After I mentioned that some time in the past, I used to be attacked by some individuals purely for telling the reality. Now that Ripple says it and has confirmed it, what?

As a reminder: Ripple’s use case and cross-border fee answer for XRP, regardless of how profitable (and I hope it’s as a result of it is a… https://t.co/yWu9KAOU9X

— Panos 🔼{X} (@panosmek) March 30, 2024

Notably, this assertion is supported by a doc from Ripple for SEC. Within the paper, the fee agency explicitly states that almost all ODL transactions are demand-neutral, thus exerting no affect on the price of XRP.

Moreover, Mekras underscored the presence of unfavorable demand with Ripple’s fee answer. He famous that almost all XRP utilized for ODL originates instantly from Ripple’s escrow. He believes the inflow of XRP bolsters promoting stress because it introduces “new” XRP tokens into the market.

Consequently, Mekras emphasised that Ripple’s fee answer alone for cross-border transactions can not improve the worth of XRP.

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Neighborhood Member Disagrees

Alternatively, pro-XRP X person Nietzbux finds Mekras’ view regarding. First, Nietzbux highlighted the need of a extremely liquid market and an ideally greater XRP value for the environment friendly functioning of ODL or any bridging product using XRP. 

Notably, the thought is that XRP’s provide can not accommodate multi-billion greenback transactions until XRP is pricey.

Nietzbux observes that pundits like Mekras push the concept the XRP group wants extra builders to stimulate demand for XRP to raise its value through varied utilities. Nonetheless, Nietzbux finds this logic absurd. 

In line with him, it implies that Ripple is counting on the group to generate the needed demand and value improve for XRP.

To assist his argument, Nietzbux cited a state of affairs during which a big financial institution could inquire in regards to the feasibility of transferring $100 billion of worth in three seconds utilizing XRP.

Ripple’s purported response can be that it’s ready for the XRPL group to generate the demand to extend XRP’s value to make the transaction doable.

Can ODL increase the worth of XRP?

I respect a few of the very good individuals who say ODL won’t ever increase the worth of XRP. However that argument depends on some logic that I’ve bother accepting.

For ODL to work effectively, or for any bridging product utilizing XRP, you want extremely…

— nietzbux (@nietzbux) March 30, 2024

In response, Mekras stressed that the attitude Nietzbux finds absurd is definitely the truth. He identified that different group members, together with Ripple’s Chief Technology Officer David Schwartz, have echoed related sentiments quite a few occasions.

Concerning the query of transferring $100 billion with XRP through Ripple’s answer, Mekras famous that the precise reply is that the liquidity for such a transaction to occur is absent.

Moreover, Mekras prompted Nietzbux to ponder why Ripple has not efficiently onboarded any main banks for ODL or why the ODL quantity stays comparatively low in comparison with XRP’s whole buying and selling quantity.