With Ripple facing a lawsuit from aggrieved investors, a few minnows in the community are considering forking the protocol to stop the company from mass dumping tokens in the open market, as per Forbes, September 3, 2019. Quarterly reports from Ripple reveal a major chunk of their profit comes from selling XRP tokens to exchanges and market makers. XRP was the only top 10 crypto that didn’t follow Bitcoin on its parabolic rise this year, surging nearly by four-times.
If It’s Decentralized, We Can Control It
A Twitter user gained mixed reactions when they claimed they want to fork the Ripple network to prevent the company from continuous dumps.
Ripple is undoubtedly strong technology, but the economics of the network and the company’s business model have left retail investors devastated.
Bitcoin and the rest of the market have been performing exceptionally since their bottom in 2019, however, XRP is down 40 percent since January 1, 2019.
With almost a billion tokens of escrow releasing every month, retail investors are soaking up a large amount of the supply released by the company into the open market.
Community members looking to fork it believe that if the protocol is decentralized as the company claims, then it can be usurped by the community. This statement displays their lack of fundamental understanding of how the Ripple network works, with centralized validators who keep the network in check.
A Problematic Plan
First off, Ripple’s investment thesis hinges on the number of partnerships it is able to amass with global financial institutions. This is only possible with a high caliber team leading the charge. Goldman Sachs is not going to talk to an anonymous Twitter user about implementing their software in their tech stack.
Secondly, even if they fork it and decentralize the validation process, it just becomes a less developed rip off of Stellar Lumens – the original Ripple fork.
The plan, while noble, isn’t realistic to execute. Despite the notorious reputation Ripple is developing, their technology is unarguably strong and their ability rake in clients is unmatched.
Investors in Ripple believe that this is part of a long-term vision and the company must have access to money to help the platform scale.