Back to the list

Xumm Team Votes to End XRP to XAH Burn2Mint Process

source-logo  thecryptobasic.com 02 April 2024 14:43, UTC

The Xaman (formerly Xumm) team, led by founder Wietse Wind, has voted to end the Burn2Mint (B2M) approach involving XRP and XAH, the native asset of the XRPL sidechain Xahau.

As first spotlighted today by XRP community figure Eri, data confirms that Richard Holland, the CTO at the Xaman development team XRPL Labs, recently closed an amendment seeking to implement this change, merging the amendment to the Xahau code.

🚨 There’s been a rather big CHANGE for the #XRP ecosystem.

Burn to mint : “B2M to zero” Code has been merged to the Xahau Network, for a next new version, that validators vote on. Ending the burn 🔥 of #XRP to $XAH token issuance, locking in low supply.https://t.co/SBvHW3FCsp

— 🌸Crypto Eri 🪝Carpe Diem (@sentosumosaba) April 2, 2024

Notably, Wietse Wind initiated the amendment three weeks ago, proposing the discontinuation of the Burn2Mint strategy for generating new XAH tokens. Wind cited numerous reasons for this accelerated cessation.

The XRP to XAH B2M Approach

For context, the Xaman team originally introduced the B2M mechanism as a method for users to obtain XAH directly, bypassing the need for secondary markets or cross-chain bridges. It allows users to burn XRP, effectively eliminating it from circulation, and mint an equivalent amount of XAH.

As affirmed by Wind in the latest amendment, the Burn2Mint process was structured with a gradual decline in yield. This gradual decline would eventually lead to 0, mitigating inflation and ensuring a regulated distribution of XAH by essentially halting the minting of new XAH tokens.

However, given the increasing availability of XAH on secondary markets and potential regulatory concerns, the Xumm team has decided to cease the B2M feature abruptly. The amendment, now passed, reduces the B2M yield to zero in an approach that makes it look like the B2M timeline has ended.

According to the amendment, despite this alteration, critical functions such as account activation and regular key/signer list synchronization will persist. This guarantees that although XAH can no longer be minted through B2M, the platform’s infrastructure remains supportive of its user base.

The Xahau Launch

The Xaman team launched the Xahau sidechain last November, providing network participants with access to the attractive XRPL features while leveraging additional infrastructure not available on the XRPL, such as native smart contracts through Hooks.

Following the launch, Ripple’s CTO David Schwartz stressed that Xahau is a good avenue to test out the functionality of Hooks before its eventual deployment in the XRPL. Notably, the delay in deploying Hooks to the XRP Ledger is due to concerns over potential risks the protocol could bring to the network.

When the Xumm team introduced the Burn2Mint approach as the avenue to get XAH, some XRP proponents raised concerns about parting with their XRP tokens to mint XAH.

However, David Schwartz allayed these concerns, emphasizing that the approach boasts several benefits, such as serving as a source of demand for XRP, an opportunity to procure XAH in a decentralized and secure manner, and the absence of issues with cross-chain bridges.