What is XRPL? The XRP Ledger

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Today, the XRP coin is one of the most promising crypto projects on the market. Despite its low price, it has consistently ranked among the top 10 most valuable crypto assets on the market for several years. At the same time, despite its high investment appeal, the Ripple XRP project offers more than just an opportunity to increase capital, having in its arsenal a blockchain based on numerous valuable tools for working in the ecosystem called XRP Ledger.

In this article, we will talk about what XRP Ledger is and how it works, look at its fundamental aspects and the technical solutions it offers, and assess the future prospects of the XRP Ledger project.

Key Takeaways

  1. XRP Ledger is primarily focused on crypto payment systems, but also offers the possibility of creating CBDCs, stablecoins, and tokenization of various kinds of digital assets.
  2. Through the use of innovative technologies, XRP Ledger offers one of the best comprehensive and feature-rich payment solutions on the market.

What is The XRP Ledger (XRPL) and How Does It Work?

XRP Ledger is a sustainable decentralized public blockchain managed by a global knowledgeable community of developers. Among its distinguishing characteristics are operation speed, energy efficiency, and high reliability. This blockchain also features full developer support, offering a number of interesting tools for blockchain-based system and application development, low transaction costs, and a large community of experts that provides developers with a strong open-source base to execute the most complex projects without significant collateral damage to the environment.

XRP Ledger (XRPL), launched in 2012, is a decentralized free and open-source blockchain ecosystem whose advantages open up vast development opportunities. Thanks to the technological potential of this system, the developers managed to find the perfect balance between cost ($0.0002 per transaction), speed (execution of transactions in 3–5 seconds) and scalability (1500 transactions per second), as well as environmental friendliness (energy-efficient blockchain process). XRP Ledger also features the first decentralized exchange (DEX) and proprietary tokenization capabilities built into the platform protocol. Deployed in 2012, XRPL supports enterprises and Python, Java, and JavaScript developers with powerful software and solution flexibility. Along with its native coin, XRP, XRP Ledger is used by developers to create solutions that eliminate inefficiencies, including remittances and digital asset tokenization.

It has recently been reported that XLS-20, a standard for NFTs created on the XRPL network, has been implemented into the XRP mainnet through the joint efforts of XRPL community members and Ripple engineers, offering developers a variety of advanced features to work with them, such as launching a mechanism to transfer to creators of unique coins a portion of the value of tokens sold in the secondary market or enabling a co-ownership option in which two or more people own NFT digital assets.

Fundamental Aspects of the XRP Ledger

XRP Ledger is a multifaceted and diverse system of interconnected elements, thanks to which it is possible to maintain stability and high efficiency and performance of the entire system. As the foundation for many decentralized applications and systems, XRPL has a number of fundamental aspects that allow the distributed ledger to remain one of the most valuable and useful tools in the crypto and DeFi space. Let’s consider them in more detail.

1. Payment System Basics

One of the main challenges facing XRP Ledger is payment processing. The creation and development of the XRP blockchain made it uniquely possible to conduct all kinds of payment transactions using crypto technology, which ultimately led to incredible results: XRPL uses a consensus protocol, in which designated servers called validators come to an agreement on the order and outcome of XRP transactions every 3–5 seconds; transaction processing speed inside is 1500 TPS and the commission for each transaction is almost the lowest among all blockchain projects at only $0.0002 per transaction.

2. Payment Types

To date, the blockchain offers the main type of implementation of XRP plantations “point-to-point”. However, at the same time, it is possible to carry out transactions using other, more specialized types of payments, each of which has its own unique features.

Direct XRP Payments

This type of payment is the easiest way to transfer any amount of XRP token inside the XRP Ledger between users. At the same time, it literally takes several seconds to process transactions due to the architecture and algorithms on which the blockchain is built.

Cross-Currency Payments

XRP Ledger can send cross-currency payments, exchanging XRP, tokens, or both assets at once. As with direct XRP payments, this payment type uses the Payment transaction type.

By default, cross-currency payments deliver a fixed amount to a destination at a variable cost to the source. They can also be partial payments that deliver a variable amount to a recipient within a fixed send limit.


Through the XRP Ledger check feature, users can create and cancel pending payments, which can be cashed by the intended recipient. Checks created with XRP Ledger work similarly to personal paper checks in that the sender creates a check that specifies the amount and the recipient of the funds. Checks are cashed by the recipient to withdraw money from the sender’s account to the recipient’s account.


The XRP Ledger provides the ability to send conditional XRP payments through Escrow. A conditional payment is an escrow payment, since it sets aside XRP for delivery when certain conditions are met. Several requirements for successfully completing an Escrow include time-based unlocks and cryptographic conditions. The Escrow can expire unless it is completed by the specified date.

Partial Payments

When the Amount field is left blank in the XRP Ledger, the transaction will deliver the exact amount after the exchange rate and transfer fees have been considered. Payments made with the “Partial Payment” flag (tfPartialPayment) will reduce the amount received instead of increasing it. Partial payments are valuable for returning payments without incurring additional fees.

Payment Channels

Paying through a Payment Channel allows you to send “asynchronous” XRP payments that can be divided into small chunks and settled later. Payment channels are temporarily set aside XRP. Senders create Claims against the channel, which recipients verify without having to send an XRP Ledger transaction or wait for consensus approval of a new ledger version. An amount of XRP authorized by a Claim can be redeemed at any time by the recipient.

3. Tokens

The XRP Ledger allows tokens for a wide range of assets other than XRP. Trust lines are used to track relationships between accounts when tracking standard tokens. Tokens may be issued by any account to recipients willing to hold them; however, tokens cannot be unilaterally given away to users who do not wish to hold them. Any type of value can be represented by a token, such as stablecoins backed by assets outside the ledger, purely digital tokens explicitly created for the XRP Ledger, and community credit.

4. Decentralized Exchange

Since the launch of the XRP Ledger in 2012, it has been operating continuously as the world’s oldest decentralized exchange (sometimes abbreviated “DEX”). On the XRPL decentralized exchange, users can trade any number of currencies at their discretion, and these trades are tracked on demand. It is possible to create a currency pair consisting of XRP and a token or two types of tokens; a token is always identified by its combination of a currency code and an issuer. Two tokens can be traded with the same currency code but different issuers, or the same issuer but different currencies.

5. Consensus Network

For the purpose of resolving the double spend problem and choosing which transactions to execute in what order, the XRP Ledger uses a consensus algorithm. Similarly, consensus governs the rules for processing transactions. The principles and rules of the consensus algorithm that enable users to transfer funds across national boundaries as conveniently as sending an email (including fiat currencies and digital currencies).

6. XRP Ledger Servers

In order to power the XRP Ledger, two types of server software are used:


This is the main P2P (peer-to-peer) server that runs the XRP Ledger. Each rippled server joins the peer network, transmits cryptographically signed transactions, and maintains a local copy of the full blockchain. The source code for rippled is written in the C++ programming language.

Clio API Server

A Clio server does not connect to the peer-to-peer network. Instead, it extracts data from a specified rippled server which is connected to the P2P network. By handling API calls efficiently, Clio servers can help reduce the load on rippled servers running in P2P mode.

XRP Ledger is one of the leading decentralized systems offering crypto plantation solutions. The closest competitor to XRP is Stellar XLM.

Fast Fact

Technical XRP Ledger Ecosystem Solutions

Today, XRP Ledger is a rapidly evolving technology model of Ripple Labs, which has wide applications and serves as the basis for many solutions, mainly focused on working with payments in both fiat currency and crypto assets within financial institutions, all types, and sizes. The main areas of application of XRP Ledger are generally considered to be the following:

1. Central Bank Digital Currencies (CBDCs)

Ripple has developed a platform for CBDC operation on which tokens can be issued, managed, burned, and transacted. This solution runs on the XRP Ledger blockchain and allows central banks to interact with other payment systems in a sustainable and secure way. This technology marks an important milestone in Ripple’s expansion into the CBDC space and could pave the way for other global CBDC projects with central banks, as well as provide additional legitimacy to Stablecoin and CBDC in the crypto space.

2. Tokenization

The process of tokenization involves capturing a certain percentage of rights to something of value through the use of cryptocurrency tokens. Tokenization can be applied to tangible as well as intangible assets. The process of tokenization occurs by creating a record of ownership of an asset or part of it in a blockchain registry. Then, after the asset is tendered and purchased, the smart contract automatically changes the owner’s details in the registry.

Any type of asset can be tokenized on the XRP Ledger, including interchangeable tokens, stablecoins and Central Bank Digital Currencies (CBDC). As of May 2022, more than 5,400 currencies have been issued and traded on XRPL.

3. DeFi

XRP Ledger (DEX) provides access to financial products and services that can be accessed directly through a decentralized exchange that is native to the protocol and uses a central limit order book model for trading digital assets. Users can interact with the DEX through order book interfaces such as Sologenic and trade directly on the XRP Ledger. This development was a breakthrough step for Ripple Labs on the way to creating a functional ecosystem for interacting with the DeFi space.

4. Stablecoins

In addition to supporting payments, XRPL can also be used as a mechanism for issuing stablecoins with a fungible token technology known as Issued Currencies. As a stablecoin platform, Issued Currencies offers a simple yet rich set of management tools, making it easy for issuers to manage and issue any assets, including stablecoins.

The XRP Ledger allows financial institutions to issue stablecoins using Issued Currencies. It is simply a matter of setting up an issuing account and selecting the configuration options that are desired for that particular stablecoin in order to utilize this functionality. The use of Issued Currencies facilitates a very convenient, stable, and highly secure process that significantly reduces the risk associated with the business.

5. Payments

By implementing XRP Ledger, it can be assured that users’ assets are moving worldwide quickly, offering instant transactions, treasury payments, payroll payments, and other transfers worldwide. XRP can also be used as a medium of exchange for international payments, with low fees, by creating an XRP wallet, such as Xumm, for users to use when making global payments and transfers. For instance, RippleNet, one of the largest decentralized networks of banks and payment processors, allows users to make international payments using the XRP Ledger through their decentralized network.

XRP Ledger Development Perspectives

Without a doubt, XRP Ledger has a great future due to the high potential that is revealed as the development of a payment platform that, in terms of functionality, speed and reliability, will not be inferior to such giants in the field of supplying payment solutions as Visa, MasterCard and other companies that occupy leading market positions today. The improvement of the XRP Ledger has paved the way for a fundamentally new approach to making both local and cross-border payments and will help create a system that will meet the highest quality and security requirements, as well as offer the widest list of opportunities associated with the development of decentralized solutions based on the XRP blockchain, work with DeFi protocols and even the NFT market.

Thanks to the strong support of the project in the form of a global developer community, XRP ledger’s decentralized exchange has every chance to take a worthy position in the Ripple ecosystem to create all the necessary conditions for carrying out the necessary operations to tokenize tangible and intangible assets, create CBDCs and stable coins for private and corporate clients, improving the trading conditions for both the XRP coin itself and other tokens as part of the use of the blockchain. All this will create a fertile ground for cooperation and integration with other projects in the world of crypto technologies, which, as a result, will help XRP Ledger become one of the most significant solutions on the market for working with crypto processing and payment systems.


XRP Ledger is a powerful tool that today is the main one for experimenting with payment services on the way to creating a universal, convenient and fast platform that allows not only to trade digital assets, but also to make instant payments, regardless of the volume of the transaction and the distance between the sender and recipient. This is an indispensable solution in the crypto industry, which will become a benchmark in the field of payment processing and will help to take a fresh look at the process of mutual settlements and exchange, revolutionizing the current financial system.

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