A deeper dive into XPRL and its XRP token
- What is XPRL?
- How does XPRL work?
- Ripple versus the Securities and Exchange Commission
- Latest innovation: Ripple USD Stablecoin (RLUSD)
- XRP in numbers
- Our view on Ripple and XRP
What is XPRL?
The XRP Ledger (XRPL) and its corresponding XRP were developed in 2011-2012 by David Schwartz, Jed McCaleb and Arthur Britto, before Ripple (the company) was founded. The technology was developed to create a global payment network for businesses and financial institutions that could rival traditional channels. As it aims to provide a new global payment network, the XRP Ledger was designed to be faster, cheaper and more scalable as Bitcoin. As Ripple was one of the earliest pioneers in the blockchain space, it has amassed an impressive and committed community.
How does XPRL work?
The XRPL ledger consists of various crucial elements: the Ripple Protocol Consensus Algorithm (RPCA), the XRP token, and validators.
The XRPL and RPCA
The XRPL is a decentralized blockchain designed for fast, low-cost financial transactions, powered by its native token, XRP. Unlike traditional blockchains that rely on energy-intensive mining, XRPL uses the Ripple Protocol Consensus Algorithm (RPCA). Instead of Proof-of-Work or Proof-of-Stake, RPCA operates through a Unique Node List (UNL)—a group of trusted validators that collectively agree on transaction validity. This consensus mechanism enables secure, near-instant settlements (3-5 seconds) with minimal fees, making XRPL an efficient solution for payments, remittances, and tokenized assets.
The XRP token and its tokenomics
Unlike traditional digital assets, XRP is not mined. Instead, all 100 billion tokens were pre-issued at launch, ensuring a fixed supply. Of this total, 80% was allocated to Ripple Labs, which oversees the Ripple network and periodically sells XRP at market prices to fund ecosystem development. Currently, 37.4 billion XRP remains in Ripple's escrow.
The remaining 20 billion XRP was distributed among Ripple’s three co-founders. While each transaction on XRPL burns a small amount of XRP, the overall supply remains difficult to predict. This is due to ongoing monthly releases of 1 billion XRP from escrow, as well as unscheduled and unannounced sales by the co-founders.
Ripple versus the Securities and Exchange Commission
In December 2020, Ripple Laps and its founders were sued by the US Securities and Exchange Commission (SEC) which viewed XRP as an unregistered securities offering because the firm and founders utilized the sale profits to support operations, much like they would have if it had been a stock sale.
In 2024, Ripple secured a significant legal victory when a judge ruled that the sale of XRP tokens on exchanges did not violate securities laws, though sales to institutional investors did. The SEC appealed the decision under the Biden administration; however, with Trump’s election victory and his pledge to adopt a more industry-friendly stance, regulatory sentiment appears to be shifting.
With the departure of Gary Gensler—widely regarded as an adversary of the digital assets market—and new leadership at the SEC, the landscape is evolving. Recent indications suggest that the SEC may forgo further appeals, potentially bringing an end to Ripple’s five-year legal battle.
Latest innovation: Ripple USD Stablecoin (RLUSD)
In December 2024, Ripple launched its newest innovation, the Ripple USD Stablecoin (RLUSD). The stablecoin was designed to aid Ripple’s push to become the leading global payment network by providing users with stable and regulated assets as RLUSD has been approved by the New York Department of Financial Services (NYDFS). Since then RLUSD has surpassed 100,000 transactions. Currently, RPLUSD has a circulating supply of $109.7 million.
XRP in numbers
Since its launch in 2012, the XRP token has experienced substantial growth in users, transactions, and market capitalization. Currently, XRP trades between $2.30 and $2.50, with a market capitalization of approximately $140 billion and a fully diluted valuation of $242 billion, making it the third-largest digital asset—behind Bitcoin and Ethereum (excluding USDT as a stablecoin).
The Ripple network now boasts over 6 million active accounts, with 30,000 to 50,000 daily active users—a significant increase since November 2024. Additionally, the network processes an average of 2 million transactions per day, reflecting notable growth over the same period.
Our view on Ripple and XRP
Let’s first start with a little bit of a critical eye on Ripple and XRP. First of all, the tokenomics of the XRP token aren’t great. Normally, if a single entity controls 80% of the supply, which also happened with the Trump token, you shouldn’t touch it. Furthermore, the remaining supply was allocated to the three founders. Yeah…, that’s not great, especially as these parties continue to sell their holdings, so there is quite some sell pressure. However, this selling pressure has been absorbed quite nicely by the strong community of the XRP token.
But it’s not all negative, the number of XRP holders is steadily increasing and the activity on-chain is also heating up. Furthermore, where legal battles with the SEC characterized the past five years, it currently seems that his negative period is over. This will allow Ripple to focus on developing Ripple, potentially unleashing a new wave of innovation and adoption.