/ Crypto 101

Coin Profile - XRP

The original founders of XRP expressly wanted to create a “Bitcoin without mining”, with the thought that building a system to work with the current financial infrastructure was better than trying to replace it.

Today RippleNet, the network behind XRP, primarily services international banks, providing fast, cheap, cross-border payments, CBDC as a service, and crypto liquidity services. Even though what XRP has become is far from Bitcoin’s goal of a decentralized, peer-to-peer payment system, that hasn’t stopped it from becoming one of the largest cryptocurrencies in terms of daily trading volume and market cap.

“There are maybe 3 people that need to collude to break bitcoin or more likely 1 government.” - XRP Founder Jeb McCaleb, 2011

XRP_Ripple_Quadency_Coin_Profile_Price_EvolutionXRP Price History

What is XRP?

XRP is a cryptocurrency that was issued in 2012 off a federated blockchain called the XRP Ledger (XRPL), and is run by a for-profit corporation named Ripple. The original intention of the founding team was to offer a better and less “wasteful” international payments solution than Bitcoin.

Since its early days, XRP has been a hugely popular speculative crypto asset. The XRP army was one of crypto’s first mega armies in social media and remains active even though the larger crypto community shows immortal disdain for the controversial premine of XRP (see tokenomics). Unlike most other cryptocurrencies, Ripple’s main userbase is international banks and payment processors. Instead of “Be your own bank” as Bitcoiners might say, XRP’s use case outside of speculation is really “Keep the banks, add blockchain”.

The idea of Ripple was to reduce the friction of international payments between banks, including costs and speed of cross-border transactions and the method of exchange, in the hopes of digitizing the world economy.

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Project status
2011 - Work on XRP Ledger begins
2012 - Ripple founded under the name OpenCoin
2013 - OpenCoin rebrands to Ripple Labs
2015 - Brand becomes Ripple, Brad Garlinghouse (current CEO) joins team
2018 - Mainnet (RippleNet) launched
2020 - Ripple sued by SEC (ongoing)


Making headlines:
When people today first learn about XRP, it’s often through the highly publicized SEC lawsuit filed against Ripple Labs in December of 2020. The SEC charged Ripple Labs and two large XRP holders (founder Christian Larsen and CEO Brad Garlinghouse) with raising $1.3 billion in an illegal securities offering by selling XRP to investors from 2013.

In other news:

  • Jeb McCaleb completes his 9 billion XRP sell-off on July 17, 2022, officially shutting down his infamous “Taco Stand” wallet.
  • Blockchain.com joins a list of major exchanges delisting XRP (they and the others eventually relisted, but Coinbase did not).
  • OpenCoin (later rebranded to Ripple) launches a “Better Bitcoin”.

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Does it have staying power?

Ripple has built up massive network effects coming into the crypto sphere so early, not to mention they have a deep list of backers and the team is well connected within the international banking community. However, they face competition from private companies like Meta, CBDCs that have just begun to take shape, stablecoins, and other payments-focused cryptocurrencies like Dash and Bitcoin’s layer-2 Lightning Network.


  • It was reported in 2019 that 38% of the world’s top 100 banks were linked to Ripple. However, banks on the RippleNet are not required to use XRP for transactions on the XRP ledger.
  • XRP transactions take an average of 3-5 seconds to settle and cost about $.0002 per transaction. Ripple reports that the XRP ledger can consistently process 1500+ transactions per second (compared with Solana’s 2825 t/s and Visa’s 65k t/s).

170+ jobs are currently available on Ripple.com, primarily engineers.

Social traction
Ripple has over 3.14 million followers across social media platforms and an active #XRParmy.

Ripple is backed by 11 venture capital firms, including:

  • Andreessen Horowitz
  • CME Venture
  • Santander InnoVenture
  • SBI Group

Ever been hacked?
No. But 11 million XRP (worth $13.9 million) were once hacked from Liquid Exchange

Note* The 2020 SEC lawsuit was not the first of Ripple’s troubles. In 2015, FinCEN fined them $700,000 for selling XRP without the required authorization. Then in 2018, Ripple was sued in a class-action lawsuit for allegedly violating state and federal securities law in selling XRP to the public.

$XRP Tokenomics

  • XRP is the native, pre-mined cryptocurrency of the XRP Ledger and has a capped supply of 100 billion.
  • The initial launch included a controversial allocation of 20 billion or 20% of XRP tokens to the founders, something that led to considerable controversy.
  • The crypto community has a long-standing criticism of XRP around the possibility that a lot of XRP could be released at once and have a strong effect on price.

Total supply

Token distribution
100 billion XRP were pre-mined in January 2013 and were allocated as follows:

  • 20% was retained by the founders of XRP: Chris Larsen and Jed McCaleb each received 9.5 billion XRP, and Co-founder, Arthur Britto, received 1 billion.
  • 77.8% was allocated to Ripple.
  • 0.2% was airdropped during the launch to increase usage.

Team & token vesting
After the team received their tokens, Larsen ended up committing 7 billion XRP from his allocation to a charitable foundation (unconfirmed), and McCaleb donated 2 billion of his XRP to a donor-advised fund. The rest was released to him monthly with a cap on how much he could sell. In July of 2022, he neared the end of the XRP release and had sold off most of the XRP, something the XRP community welcomed.

XRP-taco-stand-wallet-chartMcCalab's XRP Release Schedule

When McCaleb announced he was selling his share of XRP in May of 2014, Jesse Powell resigned his board position:

“I’m no longer confident in the management nor the company’s ability to recover from the founders’ perplexing allocation to themselves of 20% of the XRP, which I had hoped until recently would be returned.” - Jesse Powell on Reddit

By 2017, Ripple had moved 55 billion XRP into an escrow account to counteract criticisms about the risk of large releases. They set a schedule to release 1 billion XRP monthly for use on the network, with unused XRP going back into escrow at the end of each month.

The total funds raised exceed $291 million. Jesse Powell and Roger Ver are listed as individual investors, according to Messari, as well as 11 venture capital firms (see “Partnerships”).

  • Angel Round: $1.40M May 2013
  • Seed Round: $3.50M November 2013
  • Series A: $32M May 2015
  • Series B: $55M September 2016
  • Series C: $200M December 2019

Token utility

  • Speculation
  • Cross-border payments between international banks and payment processors
  • Crypto liquidity/exchange services for Ripple’s member banks and payment companies

Yes and no. The XRP ledger uses a consensus mechanism where 150 independent network participants validate transactions and secure the network. More than 35 of them are on the Unique Node list, which is determined for and by each server. The servers decide when a ledger version is validated based on the consensus of a sufficient number of trusted validators in agreement.

  • Ripple runs 6 out of 35 of the servers on the Unique Nodes list.
  • While XRP is open source and anyone can submit a pull request, Ripple has a full-time development team that manages the road map and performs most of the protocol development.

Burning Mechanism
A small amount of XRP is burned per transaction and so far, about 10.6 million tokens have been burned. At that rate, it would take an estimated 70,000 years to burn all XRP (max supply is 100 billion).

Code Audit
Nothing official has been published.

Team Transparency
Yes, the Ripple team is highly transparent. Current executive team members and founders are easily found on LinkedIn and social media (see “Team” for additional information), with the exception of Arthur Britto. CEO Brad Garlinghouse is often featured in major media outlets and regularly comments on the regulatory aspects of cryptocurrencies.

Bug bounty?

Next up for XRP

  • Win against the SEC (which would be a “W” for all of crypto)
  • Ripple has built a platform for minting and managing central bank digital currencies (the actual antitheses of Bitcoin) and is connected with several initiatives, including with governments in the UK and Bhutan.
  • Federated side chains are in the works; testnet is live.
  • Otherwise, no formal roadmap is published.

Continue your DYOR…

Ripple Website
XRPLedger Website
$XRP on Coingecko
Source Code

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Disclaimer: The content of this article is for general market education and commentary and is not intended to serve as financial, investment, or any other type of advice.