As a bridge currency, why does it need to have value or increase in value from a practical standpoint? Is it all just speculation?
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1 Answer
It has no intrinsic value, i.e. it is not backed by other arbitrary good of value (e.g. Gold).
As a bridge currency, it needs to have a certain price in order to calculate exact exchange rate between XLM and the other 2 currencies / tokens being bridged.
Also, it is limited in value, and does have utility. Which makes the price vary due to fluctuations in supply & demand. So, if the demand goes up (&/or more buyers than sellers), the prices usually go up due to competition. And vice versa, if demand goes down or there are more sellers than buyers, then prices usually go down.
