Coinbase exchange might be burning XRP in what might be considered the most subtle or unusual move ever. According to insights shared by block explorer XRPScan, the American trading platform incinerates a portion of the fees it receives from every internal XRP transfer.Coinbase relisted XRP recently after the digital exchange received clarification from Judge Analisa Torres that it is not an investment contract. Per the update from XRPScan, Coinbase burns 20 XRP as fees whenever it moves funds internally.
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While it is hard to accurately predict the reason for this burning, XRPScan noted that it is to ostensibly empty out the wallets making the transfer. Coinbase is overpaying for gas fees as the wallet reserve payments were lowered to 10 XRP a few years ago.When Coinbase moves funds internally, they burn 20 XRP as fees. Ostensibly to empty out the wallet, even though wallet reserves were lowered to 10 XRP a few years ago: https://t.co/SqKrtNE73Y https://t.co/gEApC7zvBlThe insight from XRPScan came as a result of the spotted 39,401,162 XRP worth $20,712,323, transferred from an unknown wallet to Coinbase. The community is reacting to this unusual Coinbase move as the overpayment for gas fees helps the coin more than the trading platform.As noted by Thomas Silkjær, Head of Analytics and Compliance at XRP Ledger Foundation, the trading platform could have just deleted associated wallets to make transactions even cheaper.Placing actual figures on the upper end of the 20 XRP that Coinbase pays, this is equivalent to about $10.468 based on the current price of the coin pegged at $0.5234.
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This amount is rather massive compared to the costs of transacting on other rival protocols. However, for smaller, retail transactions, XRP has earned itself a place, as this utility serves as the basis for its defense in the lawsuit filed against it by the United States Securities and Exchange Commission (SEC).