Schwartz’s “If XRPL succeeds, XRP can’t possibly be worthless” has gone viral among the XRP army, racking up over 580,000 views. Honestly, the logic has some pretty big holes—and the person saying it is Ripple’s former CTO. Did you expect him to say, “The chain can succeed without the token necessarily going up”?
He makes three arguments: low fees, XRP being the only asset without counterparty risk, and the fact that you have to hold XRP to pay transaction fees.
The first and third arguments contradict each other. If fees are so low they’re practically zero, then the demand created by “having to hold it to pay fees” is practically zero too. I’m not the one saying that; uptownsaul, someone in his replies, put it directly: the direct impact of fees and reserves on the price can be ignored. The only thing directly relevant is autobridging—as a bridge asset.
Then there’s the only counterexample he offers: unless the world gets an absolutely dominant settlement asset. Come on, that’s what stablecoins are. Ripple itself is pushing RLUSD on XRPL, and banks like Standard Chartered are backing RLUSD too. Institutions want dollar settlement, not to first convert into a volatile token and then convert back. The more successful your own stablecoin becomes, the more it crowds out demand for the bridge asset. He hasn’t accounted for that.
Then there’s the line about “even if Bitcoin dominated settlement, wrapped BTC would be on XRPL, and XRP would capture value through bridging.” The chain can succeed and assets can run on it, but who actually captures the value is another matter. Tons of stablecoins run on Ethereum, but nobody says USDT’s success means ETH is guaranteed to go up tenfold.
XRP is around $1.30 right now, while this month’s high was still above $1.50. You can have faith, but don’t use an interested party’s “I think very unlikely” as a valuation model. If you really want to know, watch how much volume actually goes through autobridging on XRPL. That number is more honest than anyone’s tweets.
He makes three arguments: low fees, XRP being the only asset without counterparty risk, and the fact that you have to hold XRP to pay transaction fees.
The first and third arguments contradict each other. If fees are so low they’re practically zero, then the demand created by “having to hold it to pay fees” is practically zero too. I’m not the one saying that; uptownsaul, someone in his replies, put it directly: the direct impact of fees and reserves on the price can be ignored. The only thing directly relevant is autobridging—as a bridge asset.
Then there’s the only counterexample he offers: unless the world gets an absolutely dominant settlement asset. Come on, that’s what stablecoins are. Ripple itself is pushing RLUSD on XRPL, and banks like Standard Chartered are backing RLUSD too. Institutions want dollar settlement, not to first convert into a volatile token and then convert back. The more successful your own stablecoin becomes, the more it crowds out demand for the bridge asset. He hasn’t accounted for that.
Then there’s the line about “even if Bitcoin dominated settlement, wrapped BTC would be on XRPL, and XRP would capture value through bridging.” The chain can succeed and assets can run on it, but who actually captures the value is another matter. Tons of stablecoins run on Ethereum, but nobody says USDT’s success means ETH is guaranteed to go up tenfold.
XRP is around $1.30 right now, while this month’s high was still above $1.50. You can have faith, but don’t use an interested party’s “I think very unlikely” as a valuation model. If you really want to know, watch how much volume actually goes through autobridging on XRPL. That number is more honest than anyone’s tweets.