XRP Holders Don't Own Slice of Ripple's Future Cash Flows, Experts Clarify
A recent tweet by crypto analyst Steph Is Crypto has brought attention to a claim about XRP holders and Ripple's future cash flows. According to the tweet, XRP purchasers have 'bought, effectively, a slice of Ripple's future cash flows.' This statement comes from an academic paper by law professor James C. Spindler published in the William & Mary Law Review.
However, interpreting this statement as proof that XRP holders legally own a portion of Ripple's revenue or profits would be incorrect, according to experts. The paper argues that XRP's value can be influenced by developments affecting its broader ecosystem, including adoption and transaction activity. This economic relationship creates an alignment between XRP purchasers and the growth of businesses or networks that contribute to demand for XRP.
But this does not mean that XRP holders have a direct legal entitlement to Ripple's corporate cash flows. As law professor James C. Spindler emphasizes, 'XRP does not give a person an equity interest in Ripple Labs.' In other words, holding XRP does not grant ownership rights or voting power within the company.