The XRP Ledger (XRPL), a decentralized public blockchain that enables the transfer of XRP, fiat currencies, and other digital assets, made significant strides in the first quarter of 2024. Despite a minor price drop, XRP, XRPL’s native token, solidified its place as the sixth-largest cryptocurrency by market capitalization, reaching $34.1 billion (currently $29M). This was accompanied by a 1.3% quarter-over-quarter (QoQ) growth in XRP’s circulating market cap.
The XRPL operates on a deflationary mechanism, systematically burning transaction fees, which puts a downward pressure on the total supply of XRP, capped at 100 billion tokens. Since XRPL’s inception, about 12 million XRP have been burned. The low burn rate in Q1 can be attributed to the network’s relatively low transaction fees (less than $0.002 per transaction). Every month, 1 billion XRP is released from escrow to Ripple, with unused tokens being placed into new escrow contracts. This process will continue until the remaining approximately 45 billion XRP becomes liquid, at which point, the deflationary pressure from burned fees will primarily affect the supply.
Despite a marginal 0.1% QoQ decrease in XRP’s price, it lagged behind the overall crypto market’s 63.0% increase, but rose 14.8% year over year (YoY). The report emphasizes that the XRPL’s revenue is measured as total fees collected by the network, which are subsequently burned, contributing to wealth redistribution from transaction fee spenders to XRP holders. Network activity saw considerable growth, with active addresses and transactions increasing by 37% and 113% QoQ, respectively.
A significant part of the transaction activity on the XRPL came from inscriptions, a transaction type that gained popularity in early 2023. Over 30 million transactions were sent to a single account by approximately 45,000 accounts involved in inscription-related activities. According to Messari, inscriptions, facilitated by XRP Script, were instrumental in driving the surge in daily payments, which skyrocketed 350% QoQ to 2 million transactions.
The report also notes that the XRP Ledger blockchain saw a net increase of 150,000 accounts, pushing the total number of accounts up by 3.1% to 5.15 million in Q1. However, new addresses decreased 12.4% QoQ to 183,000, primarily due to the high number of addresses created in Q4, coinciding with the start of inscription activity. As of the time of reporting, XRP is valued at $0.5279, down 2.5% in the past 24 hours and 3.5% in the past seven days, mirroring the broader market trend.
