Key Takeaways
- RippleX and outgoing CTO David Schwartz are leading an exploratory discussion on introducing native staking functionality to the XRP Ledger (XRPL) to align incentives and expand XRP’s utility in DeFi and institutional markets.
- The current Proof of Association model, which burns transaction fees, would require fundamental design changes to create a sustainable source of staking rewards and a fair distribution mechanism.
- Schwartz proposed two highly technical but unlikely short-term designs, including a two-layer consensus model and using transaction fees to fund zero-knowledge proofs, to enable advanced DeFi capabilities without compromising the XRPL’s core stability.
Exploring the Need for Native XRP Staking Incentives
The XRP Ledger (XRPL) is witnessing a significant expansion of its use cases, driven by new developments in decentralized finance (DeFi), tokenized assets, and the recent launch of Canary’s first pure spot U.S. XRP ETF. This evolution has prompted RippleX Head of Engineering J. Ayo Akinyele and outgoing Ripple CTO David Schwartz to initiate a deep, public discussion about the network’s future incentive structures, particularly the possibility of native XRP staking.
Akinyele noted that as XRP’s role broadens from real-time value transfer to complex financial instruments, the natural question arises: how should participation and governance evolve? On many other networks, staking aligns validators and token holders by offering financial rewards, thereby strengthening engagement and network security. However, this concept directly challenges the XRPL’s decade-old Proof of Association design, where transaction fees are currently burned (deflationary) rather than redistributed, and validator trust is earned through performance and reliability, not stake size.
Akinyele stressed that implementing native staking would require overcoming two major hurdles: identifying a sustainable source of staking rewards (potentially new programmability fees) and designing a fair distribution mechanism.
David Schwartz Weighs In on XRPL Consensus Evolution
The debate got serious when David Schwartz weighed in—and his opinion carries massive weight, especially since he’s stepping down from his role at year’s end. Schwartz, one of the original XRPL architects, conceded that the blockchain world has changed dramatically since the network’s inception way back in 2012. He stated that his “own thoughts on governance and consensus models have evolved.” His take? With all the work going into smart contracts right now, this is the right time to figure out how to bake native DeFi capabilities directly into the XRPL.
Schwartz outlined two technically compelling concepts currently being discussed within the community, though he cautioned they are “probably not realistically likely to be good, at least not any time soon.”
The first is a two-layer consensus model. An inner layer of validators, potentially selected by stake, would advance the ledger quickly, while the existing, non-staked outer layer would retain control over governance, fee structures, and amendments. This structure could potentially increase validator diversity and resilience without sacrificing the XRPL’s high throughput.
The second idea would maintain the XRPL’s existing consensus mechanism but repurpose transaction fees to fund zero-knowledge proofs that verify smart contract execution. This approach would allow complex smart contract features without forcing every node to directly run heavy computations, keeping the base ledger lightweight.
Preserving Stability Amidst Complexity
Akinyele and Schwartz made it crystal clear: they aren’t pushing for changes—they just want to fully understand the risks and rewards. The XRPL has been rock-solid for over a decade because it values trust more than money. Their takeaway is simple: if they ever move toward incentives like staking, they have to tread lightly. Why? Because adding financial complexity could easily introduce drama and competition among validators, and that would threaten the network’s decade of proven stability and fairness.
Final Thoughts
The talk about finally getting native XRP staking is a huge moment for the XRPL, signaling a major push into the DeFi world. Sure, staking is exciting for token holders who want to earn yield, but the network has to tread carefully. They have to nail the technical details and balance the philosophical trade-offs to make sure they don’t mess up the core stability that made the XRP Ledger a trusted backbone for institutional finance in the first place.
Frequently Asked Questions
Why is native staking difficult on the XRPL?
The XRPL’s current Proof of Association model burns transaction fees, meaning there is no native, sustainable source of rewards for staking.
What is the two-layer consensus idea?
A proposal by David Schwartz to split the XRPL into a staked inner validator layer for ledger advancement and a non-staked outer layer for governance and oversight.
What are the current alternatives to native staking on XRPL?
The ecosystem already features external, ecosystem-level staking-like models from platforms like Uphold, Flare, and Doppler Finance, utilizing the XRPL’s existing capabilities.