With XRP price showing minimal price movements in recent times, attention has shifted to its deflationary model and how it could help sustain price growth over time. Popular XRP community researcher “SMQKE” recently reignited discussion on XRP’s long-term price potential by highlighting its deflationary design. In a tweet, SMQKE emphasized that XRP’s supply continually decreases due to its unique burn mechanism, making it fundamentally scarce. The commentator also stressed that XRP is deflationary, adding that the token cannot be mined and that its supply is constantly shrinking. Supporting this claim, the tweet cited a statement from a published paper noting that anything limited in supply and actively used tends to become more expensive over time. Deflation by Design: How XRP’s Supply Shrinks Unlike many digital assets, XRP does not rely on mining. Instead, all 100 billion tokens were pre-issued at launch. What makes XRP notably deflationary is that a small portion, like 0.00001 XRP, is destroyed with every transaction. For context, this feature is to mitigate spam transactions. Official documents from the XRP Ledger and Ripple-backed research confirm that this deflationary mechanism is built into the protocol’s core, with no system in place for inflation or token replenishment. Notably, the XRP network has seen 13,919,025 XRP permanently removed from circulation since its inception. These tokens are neither redistributed nor collected by validators. XRP proponents often argue that as transaction volume grows, the total circulating supply decreases, enhancing scarcity over time. Meanwhile, despite the ongoing token burn, XRP’s total supply remains at 99,986,080,974 (approximately 99.98 billion). While many XRP supporters see this gradual reduction as bullish, critics often argue that it is inconsequential, as the overall supply remains nearly the same even after more than a decade of burns. Expanding Utility as a Global Bridge Asset Beyond its deflationary structure, XRP’s role as a bridge currency for global value exchange bolsters its long-term utility. The XRP Ledger supports the transfer of fiat currencies, cryptocurrencies, commodities, securities, and even loyalty points, making it one of the most versatile networks in the digital payments ecosystem. Its speed and cost-efficiency are unmatched. XRP transactions settle in 3–5 seconds with fees averaging just $0.0002. This outperforms traditional networks like SWIFT, which can take days and cost up to $50 per transfer. Competitive Edge Through Interoperability XRP also maintains a strong position in the cross-border payments space thanks to its interoperability features. Its integration with projects like Axelar enables XRP to function across multiple blockchains, enhancing liquidity. Analysts note that these interoperability bridges, along with XRP’s shrinking supply, contribute to its long-term value proposition. Comparative analysis shows that XRP rivals centralized stablecoins like USDC and even emerging central bank digital currencies (CBDCs) by offering decentralization, lower fees, and superior cross-chain utility. XRP competitor analysis | Source SMQKEs tweet What’s Next for XRP? With rising institutional interest, expanding use cases, and an irreversible deflationary model, XRP’s fundamentals appear increasingly strong. Proponents argue that as more transactions are processed and more XRP is burned, the token becomes scarcer, potentially leading to a supply shock if demand increases faster than expected. At the time of writing, XRP is trading at $2.30, down 1.65% over the past 24 hours.