Clarifying the XRPL Governance Structure
Asset manager 21Shares, which holds $11 billion in global assets under management, has published a guide addressing several widespread misconceptions surrounding XRP. Among the primary issues clarified in the report is the persistent belief that Ripple controls the underlying blockchain.
According to 21Shares, Ripple is a private technology company, whereas the XRP Ledger (XRPL) operates as an open, decentralized public blockchain. Ripple operates only a single validator out of the 35 validators on the network's default Unique Node List. More than 150 known validators operate across the broader network, including entities such as universities, exchanges, businesses, and individuals. Consequently, running a validator does not grant Ripple unilateral control over the ledger.
Distinguishing Between XRP, XRPL, and Ripple
The guide emphasizes the distinction between XRP, the XRPL, and Ripple, which are frequently conflated. The XRPL functions as the blockchain, XRP serves as its native digital asset, and Ripple is the company developing payment and custody infrastructure utilizing the network.
The relationship involves a historical supply distribution: at launch, the founders gifted 80 billion of the total 100 billion XRP supply to Ripple to support development. In 2017, Ripple placed 55 billion XRP into escrow. Approximately 34 billion XRP remain in escrow, with releases adhering to a public schedule. However, 21Shares notes that Ripple's holdings do not translate to ownership or control of the decentralized network.
Supply Mechanics and Transaction Costs
XRP maintains a fixed supply of 100 billion coins created entirely at the ledger's launch. The network does not rely on mining or inflationary issuance, and no additional coins can be minted.
Circulating supply decreases over time as the network permanently destroys a small amount of XRP with every processed transaction. This mechanism aims to deter spam attacks by imposing a minor cost on transactions. To date, more than 14 million XRP have been burned through this process.
Payment Infrastructure and Ecosystem Expansion
The XRPL is designed to settle transactions within three to five seconds at an approximate cost of $0.0002, utilizing a low-energy consensus mechanism. XRP functions as a bridge asset designed to facilitate the movement of value between different currencies without heavy reliance on traditional correspondent banking networks. Institutions such as Japan's SBI Holdings and Malaysia's Tranglo utilize this infrastructure for payments.
Beyond payments, the XRPL supports decentralized trading, stablecoins, and tokenized real-world assets. 21Shares highlights Ripple's RLUSD stablecoin, which reached $2.4 billion, alongside approximately $4 billion in tokenized assets on the network. Additionally, 21Shares participates in the ecosystem as an issuer of a spot-based XRP ETF, which holds $157 million in net assets out of $1.51 billion in cumulative net assets across the category.
