Ripple's payment system (ODL) doesn't directly raise XRP price.
Ripple argues XRP value comes from use, not speculation.
XRP price, Ripple's promotion, and ODL volume are all connected.
Renowned crypto figure Panos Mekras recently sparked a lively debate within the XRP community, focusing on Rippleโs On-Demand Liquidity (ODL), now rebranded as Ripple Payments, and its impact on XRP’s market value.
Mekras vs. Community
Mekras firmly stated the fact that Rippleโs solution for cross-border payments, though successful, does not guarantee to influence the price of XRP. Developers revealed that Ripple promotes its products, like ODL, as part of its business strategy. Yet, recent data shows XRP purchasers make independent investment decisions, not solely relying on Rippleโs efforts.ย
According to Mekras, most ODL transactions involve immediate buying and selling of XRP, without generating significant demand for XRP from ODL itself. This perspective aligns with Rippleโs submission to the SEC, where they explicitly stated that most ODL transactions are demand-neutral and do not impact XRPโs price. Furthermore, Mekras points out that much of the XRP utilized for ODL originates from Rippleโs escrow, which introduces additional selling pressure by injecting โnewโ XRP tokens into the market.
Consequently, Mekras concludes that Rippleโs payment solution alone cannot drive up the price of XRP.
In this context, Ripple provided a document to the SEC stating that most transactions using On-Demand Liquidity (ODL) donโt affect XRPโs price. This suggests that the value of XRP isnโt heavily influenced by speculative trading but rather by its practical use in cross-border payments. This reinforces Rippleโs argument about the utility of XRP beyond market speculation.
Community Response
However, Nietzbux brings a different perspective, stressing the importance of market liquidity and a strong XRP value for effective ODL. He suggests expanding XRP’s uses to boost demand, rather than relying only on Ripple’s efforts.
Nietzbux finds this logic senseless, suggesting that it implies Ripple is relying on the community to generate the necessary demand and price increase for XRP.
He presents a hypothetical scenario where a large bank wishes to transfer $100 billion using XRP, highlighting the impracticality due to the lack of liquidity. Nietzbux prompts reflection on why major banks havenโt embraced ODL fully and why ODL volume remains low compared to XRPโs total trading volume.