Ripple holds over $1 billion in cash reserves, and its XRP token reserves may have exceeded $100 billion.
Written by: Austin King, Co-founder of Omni Network
Compiled by: 1912212.eth, Foresight News
I sold my first company to Ripple, whose chairman was my mentor and also an investor in Omni Network.
Here is an inside look at Ripple, including its origins and my thoughts on its future development.
First and foremost, the most important thing to understand is not the company's business, but the person behind it (the current chairman): Chris Larsen. Companies often reflect the characteristics of their founders, so what kind of person is he?
As early as the 1990s, he began working in financial technology companies. In 1999, he took E-Loan public, a company that once had hundreds of employees and a market value of over $1 billion. After that, he founded another fintech company, Prosper, which raised over $70 million in funding.
After nearly two decades of entrepreneurial experience, he began to create Ripple - these early experiences in the fintech field deeply influenced Ripple and the early market strategy of the XRP token.
So what was Ripple's initial strategy?
Simply put, they played the role of the "most mature adult in the room". Even today, the cryptocurrency industry is still viewed with skepticism by the outside world - one can imagine that when they created XRP in 2013, this skepticism was even more severe. To this end, they deliberately distanced themselves from the then-prevailing anarchist/libertarian culture and proposed a new narrative: their blockchain was not meant to replace the financial system, but to improve the existing system.
To further reinforce this point, their market strategy has always been to promote the adoption of XRP by fintech companies and banks.
What is Ripple actually doing?
Interestingly, their current market strategy is in many ways similar to the projects in the Ethereum ecosystem, except that the target audience is completely different.
For example, a recent public announcement was that Optimism provided a grant of 25 million OP tokens (worth over $60 million today) to Kraken to encourage Kraken to use the OP Stack. In a sense, one could say that Ripple had already written a similar script - for example, in 2019, they made a deal with the large cross-border payment company MoneyGram: Ripple provided $50 million in funding in exchange for equity, on the condition that MoneyGram must integrate the use of Ripple's products, which use XRP for cross-border settlement.
Ultimately, everything Ripple is building is to drive the adoption of XRP.
Where will Ripple go in the future?
They have massive financial resources. At the beginning of this year, they spent $285 million to buy back equity, and even so, they still hold over $1 billion in cash reserves, not to mention their XRP reserves (which I believe have exceeded $100 billion to date).
Undoubtedly, they will leverage their brand and financial reserves to further drive the adoption of XRP within the existing financial system.
Another important factor that I think many people have overlooked is that Ripple is the only large U.S. company that issues a token. Add to that Trump's proposal to eliminate capital gains tax on U.S. domestic cryptocurrencies, and this is a major boon for Ripple.
Over the past three years, Ripple has faced severe headwinds due to its roots in the U.S., such as the SEC lawsuit, which may have caused them to miss the last bull market. But looking ahead to the next 4 years, they may actually be one of the most promising companies supporting cryptocurrencies in the U.S.
