Contrary to perception, Ripple and XRP are two different and totally independent entities. The perceived connection came about because in the first big mania nearly all exchanges listed XRP as Ripple. Ripples relationship with XRP back then was not understood because it’s always been a grey area. Even now the word Ripple is still used a lot in connection to the token but it has none.
Ripple Labs helped develop XRP, resulting in the creation of 100 billion XRP tokens. The two operate independently. Ripple Labs has 60 billion of the 100 Billion produced at inception. But it has no connection. Anyone who owns XRP, owns nothing except the token. No property, no profit, no dividend, hardly any rights. It does not earn anything and is not connected to anything that does earn. So why is it worth anything?
All cryptos that are offered by projects act the same as shares do in a public company. That’s how the market values projects. So although it isn’t a requirement for projects to share profits with coin holders, this is the perception which drives the price of the coins higher. It’s just not a legal requirement like it is with a public company to share profits with it’s share holders. But with XRP this is not the case 100%. Where for all other cryptos it is the case 100%. That’s the difference between XRP and all others.
Ripple Labs is valued at 2 to 3 billion. Even if XRP was a valid share of Ripple’s value, considering only 40% of the tokens are on the open market then XRP is worth 40% of 2 to 3 billion so around 1 billion pricing the 40 billion tokens at $0.025 so 2 ½ cents each. Not $1.53 as it’s priced at today. So XRP not being a share of Ripple’s value makes it technically worthless? A Satoshi of one cent.
But here’s the kicker; Ripple still hold 60 billion XRP and can “release” them onto the market which would enrich Ripple but seriously dilute the market. Let’s say they sell them all for $0.50 each Ripple has $30 billion. Once all the tokens are sold then Ripple has zero connection with XRP except as a medium of transfer occasionally. Ripple would be rich and XRP will absolutely be it’s own entity then with no connection, so back to a worthless token of transfer.
Even if XRP became the token of preference across the world for money transfers, the miniscule fees from all those transfers would add up to profit for sure but the token doesn’t get any of that profit either. That goes to Ripple who owns xRapid. Just because the tokens were getting used more this doesn’t give them any more value. Why would it? No matter which way I look at it I can’t find any value in it.
