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In a recent tweet, Ripple CTO David Schwartz provided insights into the clawback feature of XRP Ledger (XRPL). This feature has remained a subject of discussion within the XRP community, and Schwartz’s recent insight has helped clarify its importance and functionality.
According to Schwartz, the primary purpose of the clawback feature is to address situations where the ledger is incorrect. He added that if a digital asset represents a legal obligation, and the token indicates that the obligation exists when the legal system says it does not, then the ledger is fundamentally wrong.
Responding to a discussion on X as regards the essence of the clawback feature, Schwartz stated: “The main reason for clawback is to fix cases where the ledger is literally incorrect. If a digital asset represents a legal obligation and the token says the legal obligation exists where the legal system says it doesn’t, the ledger is wrong.”
The main reason for clawback is to fix cases where the ledger is literally incorrect. If a digital asset represents a legal obligation and the token says the legal obligation exists where the legal system says it doesn’t, the ledger is *wrong*.
— David “JoelKatz” Schwartz (@JoelKatz) August 10, 2024
Clawback is an optional setting that users can select before distributing stablecoins. For regulatory purposes, some issuers must be able to recover issued tokens after they are distributed to accounts. For example, if an issuer discovers that tokens were sent to an account sanctioned for illegal activity, the issuer could recover, or claw back, the funds.
New chapter of collaboration within XRP Ledger community
A new era of collaboration in the XRP Ledger community is beginning. In a recent tweet, RippleX stated that discussions are ongoing about the evolution of XRPL Foundation into an entity that would serve the broader needs of the XRP Ledger community.
XRPL Labs, XRPL Commons, the present XRPL Foundation, Ripple and other members of the XRP community recently came together to explore ways to develop a more effective, inclusive and visible XRP Ledger Foundation, as well as the path to that goal.
The primary purpose of this new foundation is to ensure long-term security, growth and effective, decentralized contributions to XRPL.
One of the most significant near-term outcomes of these conversations is the decision to transfer existing XRPL Foundation essential assets to the new independent foundation. This new foundation will also have a governance structure intended to represent the whole XRP Ledger community.
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