For a large blockchain company like Ripple to stay afloat, it necessitates money-inflow to fund its operations. However, it’s where this money comes from that has people talking. In a recent statement, Ripple’s CEO Brad Garlinghouse intimated that the company largely depends on XRP sales to stay bustling.
Basically, Brad meant that the funds earned from XRP sales are used to fund the various blockchain-oriented projects operated by the company. These monies could also be used to fund other in-house budgets including employee salaries. In fact, a while ago, it was reported that some of Ripple’s employees are paid in XRP.
Dumping To Stay Afloat?
While Brad clarified that Ripple’s software products make a separate and significant source of revenue for the company, it’s the XRP sales that have become a thorny issue within the XRP community. Of late, there have been increased calls for the company to halt the monthly XRP sales that many think hurt the crypto’s price. Some have opined that the company is dumping XRP into the market at the expense of the community.
However, it’s notable that, lately, Ripple’s XRP sales have reduced. In the fourth quarter (Q4) of 2019, the sales decreased by 80%. This is a positive development, although the crypto’s price didn’t make much of a reaction from it.
Shoring Up Partners
Ripple has also been known to use its own funds to support its business partners. In the recent past, the company has used funds from XRP sales to support tech startups working on XRP use cases. The most recent funding from Ripple from another entity involved Ripple’s financial support for MoneyGram. MoneyGram received a cool $11.3 million from Ripple over the third (Q3) and fourth (Q4) quarters of 2019.
According to MoneyGram, these payments or funding are a form of compensation for the company for boosting liquidity and are referred to as “market development fees.” Ripple’s engagement with MoneyGram will end on July 1st, 2023.
