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Cardano founder Charles Hoskinson recently extended his criticism of Ripple’s $XRP strategy during an interview on Paul Barron’s podcast.
Speaking with Barron, Hoskinson argued that $XRP would become much more attractive if Ripple directly used part of its revenue to buy back $XRP tokens.
Key Points
- Charles Hoskinson said Ripple should dedicate 20% to 30% of revenue toward $XRP buybacks to strengthen $XRP’s market appeal.
- Hoskinson says Ripple continues selling $XRP while keeping financial gains within the company, with no rewards to holders.
- Ripple has confirmed buying $XRP on secondary markets since 2020, mainly to support On-Demand Liquidity expansion.
- Hoskinson also criticized Ripple’s original $XRP supply allocation, claiming it favored corporate control.
Cardano Founder Extends Ripple Criticisms
During the episode, Barron presented a question from a viewer about what Ripple might do for $XRP utility if the Clarity Act becomes law. The individual asked whether Ripple would likely do nothing or whether the company could introduce measures such as $XRP buybacks or revenue-sharing staking.
In response, Hoskinson said he does not expect Ripple to introduce a buyback system. He argued that Ripple will likely continue selling $XRP, earning billions of dollars, and then using that money to buy hard assets through the company itself.
According to Hoskinson, $XRP holders do not benefit from ownership of those assets. The Cardano founder further claimed that Ripple’s pattern for more than 10 years has involved selling $XRP while keeping the financial benefits within the company with products like RLUSD.
Hoskinson Calls for Direct $XRP Buybacks
Notably, Barron pointed out that Ripple does reinvest money from $XRP sales back into the $XRP Ledger ecosystem. He suggested that this could still count as a meaningful investment in the broader $XRP network.
Hoskinson acknowledged this, but argued that it is not enough. He said Ripple should directly connect its business profits to $XRP through a buyback model.
For perspective, the Cardano founder called attention to Hyperliquid, which he claims has used buybacks successfully to increase token value and improve investor appeal.
Hoskinson argued that if Ripple committed 20% to 30% of its earnings to $XRP buybacks, its $XRP relationship would become far more appealing. However, he claimed Ripple currently has no financial or legal reason to share that wealth with token holders.
He also compared the situation to Block.One and EOS, highlighting how Block.One raised $4 billion but later stated that it had no fiduciary duty to EOS holders.
Ripple Has Confirmed $XRP Purchases
However, it is important to note that Ripple has publicly confirmed purchasing $XRP on the secondary market since at least 2020. Ripple disclosed these purchases in its $XRP Markets Reports, mainly to support its growing On-Demand Liquidity (ODL) operations and maintain healthy market liquidity.
For instance, in Q1 2022, Ripple purchased $1.081 billion worth of $XRP but reported net sales of $273.27 million. In Q2 2022, Ripple’s purchases rose to $1.717 billion, while ODL-related sales reached about $2.126 billion, producing net sales of $408.9 million.
By Q1 2023, Ripple reported $XRP purchases totaling $2.569 billion, compared with $2.737 billion in Q4 2022. Meanwhile, Ripple recorded net sales of $361.06 million during Q1 2023, compared with $226.31 million in the previous quarter.
Ripple consistently explained that these purchases help secure enough $XRP supply for its growing payment business while limiting market disruption. However, they do not function as traditional corporate buybacks.
Previous Criticisms
Hoskinson’s recent comments build on criticisms he also shared earlier during an interview on The O Show. In the discussion, he pointed out that Ripple originally allocated between 70% and 80% of $XRP’s total supply to itself at launch, giving the company major control over the asset.
He argued that Ripple’s large reserve position allows the company to sell $XRP, generate cash, acquire assets, and grow its business. According to Hoskinson, $XRP holders have no legal claim to the corporate assets or profits Ripple builds through those sales.
Hoskinson claimed this allows Ripple to benefit from $XRP-driven momentum while holders only retain the token itself and access to the network. He compared Ripple’s model to Tether, where a centralized company takes in most economic value while token holders receive no direct share of company profits.