Recent actions by Ripple have reignited curiosity among investors about the ongoing developments with respect to XRP. Ripple CTO David Schwartz has made some fascinating observations on the relationship between XRP and Stellar (XLM).
While the overall cryptocurrency community is still concerned about how it is possible to stabilise XRP and other cryptocurrencies, Ripple has interestingly responded to it on a hopeful note.
Ripple CTO says real-world adoption will stabilize XRP
Speaking during the event, Schwartz cast his view on what could be seen in the future of cryptocurrencies as people continue to use them in the real world. He proposed that lower volatility would naturally follow from real-world use cases. Schwartz explained,
“We could see cryptocurrencies themselves become more stable as they get real-world adoption… Real-world use cases, I think, will lead to stability.”
Remarkably, when questioned about the possibility of really stable cryptocurrencies, decentralized and devoid of central authority, Schwartz projects such as DAI, a crypto-backed stablecoin.
A centralised price feed means the stablecoins aren’t fully decentralized. However, the Ripple CTO explained, they are a step in the right direction to making the cryptocurrency markets more stable. “We might witness more stability in these types of markets if such projects are successful,” he added.
AMMs Could make XRP a stablecoin for cross-border payments
Additionally, few members of the community of XRP investors and traders have said that Ripple (XRP) would be more useful if it were associated with stability. They contend that a more stable XRP would be appropriate for cross-border payments, as users would not have to be concerned about large price swings.
While waiting for the XRP blockchain to be equipped with automated market makers (AMMs) capability, several members of the XRP community speculated that AMM might assist XRP in implementing stablecoin characteristics that banks would find appealing.
That’s when the host of the Digital Perspectives PermaBull (DPP) channel started the discussion. He sought advice from Elon Musk’s AI Grok over XRP’s ability to use AMMs to turn into a “stablecoin.” Grok attested to this viability.
According to the AI, AMMs could control supply and demand in a liquidity pool that held both XRP and a stablecoin like USDC, therefore stabilizing the value of XRP. This policy can effectively reduce the volatility of the XRP price, increasing the confidence of approvers.
Critics Question XRP Potential Due To Price Volatility In The Past
It was also observed that the unlocked tokens are still in the “Ripple 24” wallet. This means that there are no immediate plans to distribute them again. This is because they are held in reserve and moving, reduces the impact of significant price reductions by this method.
Unlocking raises questions about price stability, even if it can improve liquidity. Additionally, cryptocurrency companies use escrow to balance the supply chain with constant releases.
Certain analysts have expressed confusion and concern over the latest development. They are believe XRP’s increasing presence in the market could lead to larger sell-offs. This in turn may lead to possible price cuts in the near future.
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