However, market observers have highlighted a surprising trend of significant XRPL account deletions, constituting one of the largest spikes in its history.
This is the biggest spike in account deletions registered till date. pic.twitter.com/TK309hjpfk
— XRPScan (@xrpscan) June 15, 2023
T his development has sparked curiosity and raised questions about the underlying reasons and potential implications. Notably, the spike has been primarily attributed to Poloniex , a well-known crypto exchange, which reportedly deleted around 15,000 old XRP accounts, resulting in the recovery of approximately 275,000 XRP tokens.
Moreover, as the process continues, the number of recovered tokens is increasing, accompanied by more than 30,000 XRP burned in fees. Thomas Silkjær, the head of analytics and compliance at the XRP Ledger Foundation has highlighted this growing trend.
It is worth noting that the news comes shortly after Poloniex paid $7.6 million to resolve charges of sanctions violations with the US Treasury Department.
Poloniex’s Account Deletion and Token Burn
Poloniex’s decision to delete individual accounts and maintain the minimum reserve balance for each user has led to a substantial token burn in fees. With the deletion of 15,000 accounts, a significant amount of XRP tokens has already been burned.
However, the impact could be even more significant considering the reported total of 84,000 accounts held by the exchange. If all these accounts were to be deleted, it would result in a burn of 168,000 XRP.
This process involves identifying inactive or abandoned accounts and retrieving the XRP tokens associated with them. The recovered tokens can then be utilized by Poloniex for various purposes, such as improving liquidity or supporting other exchange activities.
Understanding XRPL and its Significance
The XRP Ledger is an open-source, decentralized blockchain protocol that facilitates fast and low-cost transactions. It serves as the backbone for XRP, Ripple’s utility token utilized for transactions and remittances.
XRPL distinguishes itself from other blockchain networks through its consensus algorithm, known as the Ripple Protocol Consensus Algorithm (RPCA), which offers scalability and high throughput.
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