Does XRP have a burning mechanism? Here is what you need to know 🔥

The Basics of XRP and Supply

XRP, the native cryptocurrency of the Ripple network, is known for its fast transactions and focuses on cross-border payments. With a fixed total supply of 100 billion XRP, the question often arises whether it employs a burning mechanism to manage or reduce the supply.

🔥 Does XRP burn coins?

Yes, XRP has a burning mechanism, but it works differently than other cryptocurrencies like Ethereum.

🏦 Transaction fees are burned:

Every time an XRP transaction is processed, a small amount of XRP is burned (i.e., permanently removed from circulation).

Example: 0.00001 XRP per transaction is the typical fee.

Purpose: Prevent spam attacks and ensure network efficiency.

📉 How does this affect the supply?

The burning mechanism ensures that the XRP supply gradually decreases over time.

While the burn rate is low, it adds up to higher transaction volumes, especially as adoption increases.

Currently, the impact on the total supply is negligible, but over decades it could play a more significant role.

⚖️ Why are there no larger burning events?

Unlike tokens that perform massive burns to increase scarcity and drive up prices (e.g., Binance Coin), the burning process of XRP is directly tied to its utilities and transaction usage.