Charles Hoskinson, founder of Cardano, has stirred a new debate around XRP, criticizing its structure and value model in a recent podcast.
Hoskinson argued that there is “nothing” within the Ripple network that naturally creates buy demand for XRP. According to him, the token does not have built-in mechanisms, such as staking rewards or ownership rights, that would directly drive long-term price appreciation.
He stressed that XRP holders do not gain any legal claim over Ripple’s business, assets, or revenue, describing the company as a private entity with its own shareholders.
Key Points
Cardano’s Hoskinson says XRP has no built-in demand drivers or holder benefits.He argues Ripple controls most XRP supply and benefits from its sales strategy.XRP sales fund Ripple’s acquisitions and business expansion efforts.Hoskinson compares XRP investors to market participants holding USDT.
Ripple Sells XRP to Strengthen Its Business
Notably, the Cardano founder raised concerns about XRP’s initial distribution. Specifically, he stated that a large portion of the supply, between 70% and 80%, was allocated to Ripple.
He described a cycle in which Ripple sells XRP on the market for cash, then uses the proceeds to fund acquisitions and expand its business operations. In his view, this creates a “value transfer” toward the company rather than token holders.
Hoskinson added that even as Ripple builds new products or acquires firms, XRP holders do not benefit directly from these developments financially.
To back his claim, Hoskinson referenced past disclosures in the U.S. SEC case involving Ripple, noting that XRP sales and liquidation events had been documented.
According to him, these sales, ranging from hundreds of millions to billions of dollars annually, are part of Ripple’s operational strategy. The proceeds fund expansion, including recent acquisitions such as GTreasury for $1 billion and Hidden Road for $1.25 billion.
Hoskinson Compares Holding XRP to Holding USDT
Meanwhile, in his remarks, Hoskinson compared XRP’s structure to Tether’s. He pointed out that value generated within the ecosystem primarily accrues to the issuing entity rather than to token holders.
He argued that, similar to how stablecoin reserves benefit the issuing company, Ripple’s business growth does not necessarily translate into gains for XRP investors.
In his words:
“Just like Tether, value doesn’t accrue to USDT holders. One company gets all the value, while holders only get an instrument and access to the network. They don’t actually get any price appreciation from that.”
Debate Continues
Hoskinson’s comments add to ongoing criticism of the XRP ecosystem. Many critics have described XRP as centralized due to Ripple’s large token holdings, while some, like ZachXBT, argue that retail token holders effectively serve as liquidity for Ripple without receiving proportional benefits from price appreciation.
Meanwhile, XRP supporters often point to the XRP Ledger’s built-in features and real-world utility in cross-border payments, as well as partnerships with financial institutions, as positive factors supporting its long-term relevance.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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