Ripple
Ripple is a financial-technology company that develops payment and digital-asset products. It is distinct from the XRP Ledger (XRPL), an open-source distributed ledger, and from XRP, the ledger's native digital asset. The company contributes software and operates infrastructure, but use of XRPL or XRP does not require a commercial relationship with Ripple.
The names have often been used interchangeably in older writing. This obscures different ownership, governance and legal questions: Ripple is a corporation; XRPL is a network and protocol implemented by independently operated servers; and XRP is a transferable asset recorded on that ledger.
Origins and company history
Ryan Fugger began developing Ripplepay, a system for recording obligations among trusted participants, in 2004. That project influenced later terminology but was not the XRP Ledger. In 2011, David Schwartz, Jed McCaleb and Arthur Britto began designing a new ledger that would reach agreement without Bitcoin-style proof of work. The code was completed in 2012 and the XRP Ledger launched with 100 billion XRP created at inception.[1]
McCaleb, Britto and Chris Larsen formed NewCoin in September 2012. The company was soon renamed OpenCoin, adopted the name Ripple Labs in 2013 and later shortened it to Ripple.[1] The XRPL founders transferred 80 billion XRP to the company; the remaining 20 billion was retained by founders. These were historical allocations at creation, not mining rewards.
Ripple has marketed enterprise products for cross-border payments, custody, stablecoins and institutional digital-asset infrastructure. Product names and the role of XRP have changed over time. A statement about one Ripple product should not be generalized to every XRPL transaction or every use of XRP.
XRP Ledger architecture
XRPL is a replicated state machine. Servers apply transactions to successive ledger versions, calculate the resulting balances and objects, and identify each ledger by a cryptographic hash. A ledger header commits to its transaction set, account state and the preceding ledger, while the state data includes accounts, trust lines, offers, escrows and other protocol objects.[2]
The reference server implementation is xrpld. A server can verify the current validated state without retaining every historical ledger. Full-history operators preserve older transactions and state changes for archival queries; ordinary servers may hold only a configured range of history. An early data loss means that ledgers 1 through 32,569, approximately the first week, are not available; because each later ledger contains the current state, the network continued from the surviving history.[3]
XRPL does not use Bitcoin mining or proof of stake. Servers select lists of validators they consider sufficiently independent and reliable, commonly called unique node lists (UNLs). Validators exchange proposals about candidate transaction sets. When the required agreement threshold is reached, servers apply the ordered transactions and mark the result validated.[3]
The protocol is designed to halt rather than confirm conflicting ledgers when too much trusted-validator overlap is lost or too many listed validators fail. XRPL documentation states that a server can continue to confirm valid ledgers while fewer than 20% of its trusted validators are faulty; a much larger colluding majority can violate safety assumptions.[3] These thresholds describe the protocol model, not a guarantee that every operator has chosen a diverse validator list.
Payments, issued assets and exchange
XRP payments transfer the native asset directly. XRPL also represents fungible assets issued by accounts. A holder normally creates a trust line that identifies an issuer and currency and sets a limit. The ledger enforces the accounting relationship, but it cannot guarantee that an issuer will redeem a token for an off-ledger asset or comply with law. Issuer risk, freezes and transfer settings therefore remain relevant.[4]
Payment paths can combine trust-line transfers, order-book trades and automated market makers. A cross-currency payment can specify what the sender will spend and what the recipient must receive, then execute atomically or fail. XRP may act as a bridge when it offers an efficient route, but it is not required for every payment beyond the network's fee and reserve rules.[5]
The ledger has had a built-in decentralized exchange based on offers since launch. Offers exchange XRP and issued assets through order books. Protocol amendments later added automated market-maker pools, which determine exchange rates algorithmically and issue liquidity-provider tokens.[6][7] Built-in settlement does not remove market, issuer, liquidity or smart-feature risk.
Other ledger objects include escrows that release XRP after conditions or times are met, payment channels for repeated off-ledger XRP claims and checks that a recipient can cash subject to available funds. The exact feature set evolves through protocol amendments.
XRP supply, fees and escrow
XRP is divisible into one million units called drops. The total supply was fixed at 100 billion XRP at creation, and the protocol does not create mining or staking rewards. A small transaction cost in XRP is destroyed rather than paid to validators. The required cost can rise when a server is under load, making transaction spam more expensive.[8]
Accounts and certain ledger objects also require an XRP reserve. Reserve values can be changed by network fee voting, so a hard-coded current amount quickly becomes stale.[9] Destroyed fees make the outstanding supply decline slowly, but market circulation also depends on holdings, escrows and lost keys.
In December 2017, Ripple placed 55 billion XRP into on-ledger escrows scheduled to release up to one billion XRP each month. XRP not used from a monthly release could be placed into new escrows at the end of the queue.[10] Escrow makes the release schedule inspectable; it does not eliminate the company's large economic interest or predict the amount sold in any period.
XRP's exchange price and market-cap rank change continuously and are not stable definitions of the network. Historical price peaks belong in dated market histories, not in an undated introduction.
Governance and amendments
Protocol changes are introduced as amendments in the open-source software. An amendment normally becomes enabled only after more than 80% of trusted validators signal support continuously for two weeks. If support falls below the threshold, the activation countdown resets.[11]
Server operators choose software versions and validator lists. Ripple publishes a recommended list and operates some infrastructure, while other organizations and individuals operate validators and servers. This model differs from proof of work and proof of stake: validator-list choice and overlap are part of each server operator's security assumptions.
It is inaccurate both to describe Ripple as the sole operator of the ledger and to imply that the company's software role, recommended lists and large historical XRP allocation have no governance or market relevance. Company influence, validator operation and protocol control are related questions but are not identical.
United States SEC litigation
In December 2020, the United States Securities and Exchange Commission sued Ripple Labs, Brad Garlinghouse and Chris Larsen over offers and sales of XRP. A 2023 summary-judgment decision distinguished among categories of sales. A final judgment entered in August 2024 imposed a US$125,035,150 civil penalty on Ripple and an injunction concerning future violations of the registration provisions.
The SEC and Ripple appealed different parts of the case. On 7 August 2025 they filed a joint stipulation dismissing the appeal and cross-appeal. The SEC stated that the dismissal resolved the civil enforcement action and left the district court's final judgment in effect.[12] The result concerns the claims and transactions litigated in that United States case; it is not a universal classification of every XRP transaction in every jurisdiction.
See also
References
- ↑ 1.0 1.1 XRP Ledger, “History”, retrieved 30 September 2026.
- ↑ XRP Ledger documentation, “Ledger Structure”, retrieved 30 September 2026.
- ↑ 3.0 3.1 3.2 XRP Ledger documentation, “Consensus Protocol”, retrieved 30 September 2026.
- ↑ XRP Ledger documentation, “Trust Line Tokens”, retrieved 30 September 2026.
- ↑ XRP Ledger documentation, “Payment”, retrieved 30 September 2026.
- ↑ XRP Ledger documentation, “Offers”, retrieved 30 September 2026.
- ↑ XRP Ledger documentation, “Automated Market Makers”, retrieved 30 September 2026.
- ↑ XRP Ledger documentation, “Transaction Cost”, retrieved 30 September 2026.
- ↑ XRP Ledger documentation, “Reserves”, retrieved 30 September 2026.
- ↑ Ripple, “Explanation of Ripple's XRP Escrow”, 7 December 2017.
- ↑ XRP Ledger documentation, “Amendments”, retrieved 30 September 2026.
- ↑ U.S. Securities and Exchange Commission, Litigation Release No. 26369, 7 August 2025.