Just a few days after it achieved a new milestone in its market capitalization, Ripple’s native stablecoin, RLUSD, has experienced a major burn activity conducted by its issuer.
Latest data from the Ripple stablecoin tracker shows that Ripple has completed a massive RLUSD burn on Ethereum, its regular deflationary mechanism aimed at removing excess supply from circulation.
Notably, a total of 30 million RLUSD tokens have been sent to an irretrievable address on the Ethereum blockchain on Thursday, May 28.
RLUSD adoption grows
In just less than two years since RLUSD’s emergence in the crypto ecosystem, the stablecoin has continued to gain rapid adoption across the crypto and DeFi space.
While RLUSD has remained in high demand, Ripple maintains the obligation to strictly control its supply on both the Ethereum blockchain and the XRP ledger.
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Nonetheless, the latest burn activity happened on the Ethereum blockchain, indicating Ripple’s unrelenting efforts to balance circulating supply with the growing Ethereum network activity.
This helps to ensure that RLUSD maintains the established 1:1 peg to the U.S. dollar while increasing its efficiency in enterprise integrations.
Why burn RLUSD?
Although the move appears to be the second RLUSD burn of the week, market participants consider it as a signal that RLUSD is actively being used across multiple firms, which tends to position its associated cryptocurrency, XRP, for wider recognition.
Aside from controlling the stablecoin supply, there are still several speculations about the intent of this regular activity. Some believe that Ripple conducts more token burns when users are redeeming more of the stablecoins for fiat or when treasury adjustments are required.
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