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XRP Ledger

XRP

A fast, low-fee payments-focused ledger created by Ripple, designed for cross-border settlement.

Symbol
XRP
Launched
2012-06-02
Creators
David Schwartz, Jed McCaleb, Arthur Britto
Ecosystem
Independent
Type
Layer 1
Consensus
XRP Ledger Consensus Protocol (a federated Byzantine agreement variant)
Smart Contracts
Yes
Virtual Machine
Hooks (lightweight, added later) and native "smart contract"-like features such as Escrow and Checks; a fuller EVM-compatible sidechain launched in 2023
Languages
C++ (core), Hooks (WebAssembly-based, for the Hooks amendment)
Funding Raised
No public ICO; Ripple Labs raised venture funding (reportedly over $290 million across multiple rounds) and retained a large XRP allocation, later placing ~55 billion XRP into escrow

Overview

The XRP Ledger is a fast, low-cost blockchain purpose-built for payments and settlement rather than general computation. It predates Ethereum and was one of the first blockchains explicitly designed to move value — rather than mine a scarce digital commodity — as efficiently as possible, closing transactions in a few seconds for fractions of a cent.

History

Origins

David Schwartz, Jed McCaleb, and Arthur Britto designed the XRP Ledger and it went live in 2012, ahead of the company that would later commercialize it. McCaleb and others founded a company (originally NewCoin, then OpenCoin) to build products on top of the ledger; that company was renamed Ripple Labs. McCaleb subsequently left to found Stellar in 2014 after disagreements over the project’s direction. Ripple’s XRP-based payment products, notably RippleNet and On-Demand Liquidity, are aimed squarely at banks and payment providers seeking cheaper cross-border settlement than the traditional correspondent-banking (SWIFT) system.

Funding

Unlike Bitcoin or Ethereum, the entire 100 billion XRP supply was created at the network’s genesis; Ripple Labs and its founders retained a very large share of it rather than raising money through a public sale. Ripple separately raised venture capital (reportedly in excess of $290 million across several funding rounds) and in 2017 committed 55 billion XRP to an escrow that releases a capped amount each month, intended to reassure the market about supply predictability.

Technology

Consensus Algorithm

The XRP Ledger uses its own consensus protocol rather than mining or conventional staking: a network of validators (originally curated heavily by Ripple, though the validator set has become more independent and diverse over time) agree on transaction ordering through a federated Byzantine agreement process, allowing settlement finality in roughly three to five seconds.

Network & Ecosystem

The XRP Ledger has historically operated largely on its own, independent from the Ethereum/Cosmos/Polkadot ecosystems, though it supports interoperability via bridges and, since 2023, an EVM-compatible sidechain that lets Ethereum-style smart contracts settle back to the XRP Ledger. Ripple has also pursued its own USD-backed stablecoin (RLUSD) on the ledger.

Smart Contracts

For most of its history the XRP Ledger favored purpose-built native features (Escrow, Payment Channels, Checks, and a decentralized exchange) over general-purpose smart contracts. The “Hooks” amendment later added lightweight, WebAssembly-based custom transaction logic, and a separate EVM sidechain now enables fuller Solidity-based contracts that interoperate with the main ledger.

Use Cases

XRP was originally conceived as “bridge” liquidity for cross-border payments — letting financial institutions settle transfers between different currencies without pre-funding accounts in each corridor. That remains its core pitch today, alongside broader use as a fast, cheap general payment and remittance rail.

Controversies & Incidents

  • SEC lawsuit (2020–2023): The U.S. Securities and Exchange Commission sued Ripple Labs and two of its executives in December 2020, alleging that XRP sales constituted an unregistered securities offering. A 2023 federal court ruling found that programmatic sales of XRP on public exchanges did not constitute securities transactions, while institutional sales directly to sophisticated buyers did — a mixed and closely watched outcome that both sides claimed as a partial win, with related proceedings continuing afterward.
  • Centralization criticism: Because Ripple and its founders held such a large share of the total XRP supply at launch, and because Ripple exerted significant influence over the early validator set, critics have long argued the XRP Ledger is more centralized in practice than its architecture suggests.
  • Founder fallout: Early disputes between Ripple’s leadership and co-founder Jed McCaleb — including a contentious, court-supervised schedule for McCaleb to sell down his large personal XRP holdings — became a prominent early controversy for the project.