• Cryptoasset Report
  • May 30, 2019

Ripple is an open-source digital currency ledger and network designed for performing global financial payments, founded in 2012.


Ripple is composed of a protocol called the Interledger Protocol (ILP) which has a built-in decentralized exchange, a network called RippleNet, a cryptoasset called XRP, several products (as described below), and a corporate entity, Ripple Labs. These work in tandem to facilitate payments between payment providers through their network, RippleNet. Ripple intends to scale to support throughput rivalling Visa, while requiring minimal energy consumption. Payment providers connecting to Ripple seek to benefit from faster and more affordable global payments and settlement times. The network promotes the use of XRP as a source of liquidity and to facilitate payments on RippleNet.

RippleNet is comprised of network of users including corporates, small banks, payment providers, and SME’s that engage with RippleNet’s three primary products to send and receive payments, which are processed by a distributed set of network validators:

  • xCurrent is a payment processing product that provides real time settlement and bidirectional messaging for banks and payment providers. Ripple cites a 4% failure rate for global payments that they intend for this product to solve.
  • xRapid is an on-demand liquidity pool of digital assets for banks and payment providers to use, where XRP is used as a bridge currency between assets.
  • xVia is an API that provides a standard payment interface for payment providers, corporates and SME’s to send global payments without creating their own bespoke integrations and networks.

RippleNet has processed roughly $15 million in transaction volume since its inception, and claims that they have amassed over 200 customers as of May 2019. The majority of those customers have been using the xCurrent product, without using XRP as a part of their workflow. In May 2019, Ripple’s global head of banking, Marjan Delattine, confirmed that 10 of their 200+ customers are using XRP in their Ripple payments workflows.

Ripple launched a grant program in May 2018 called Xpring (pronounced “Spring”) for startups that build on the XRP ledger and incorporate the XRP cryptoasset. In March 2019 Xpring partnered with Forte, a blockchain based gaming startup, that will manage a $100 million fund provided by Ripple, aimed at supporting game developers that have already built platforms with over 50,000 daily active users. Ripple launched a bank to bank money transfer app called “Money Tap” in October 2018 in collaboration with three banks: Resona, Suruga Bank, and SBI Sumishin Net Bank. Resona bank subsequently pulled out of the project.

Competitors or alternatives to Ripple’s network could be banks issuing their own stable currency for use internally, as is the case with JP Morgan issuing the JPM coin, or alternative payment processing ledgers such as Stellar.

Protocol Details

Ripple has strongly focused marketing towards banks and payment processing companies, as the Ripple network functions as a global financial settlements network. With XRP acting as a bridge currency, international banks and payment processing companies can connect using the Ripple protocol as the framework for a shared, international ledger supporting versatile transaction types. Ripple lays the infrastructure to connect these institutions, using the distributed ledger as an authoritative history of balances, debts, and transactions between banks and payment processing companies, optimizing international trading and settlements. This open-source ledger connects what would otherwise be private, internal ledgers of international financial institutions.

Distributed consensus on the Ripple network is achieved using the Ripple Consensus Algorithm. Nodes participating in the iterative consensus process evaluate transactions relayed from trusted validators, unique nodes assumed to be trustworthy, until a supermajority consensus is reached. Prior ledger states become unneeded with the closure of the most recent ledger, which will be used by the current validators as the basis for proposing the next round of transactions. Validating nodes may also participate in voting on new features and fees through the Ripple amendments system.

Thus far, the majority of the validators have been operated by Ripple Labs. Anyone can participate in Ripple’s consensus by running a validator node, though nodes must select the other nodes that they choose to trust. Ripple Labs provides recommendations for which validators to trust. As of May 2019, the network settles a ledger approximately every 4 seconds, can process ~1,500 transactions per second and has over 70 validators on the network (a full list of validators can be accessed here).


OpenCoin Inc., a corporation founded in September 2012 (not to be confused with David Chaum’s open source opencoin) started developing the Ripple Transaction Protocol (RTXP) based upon earlier concepts dating back to a predecessor project in 2004 called Ripplepay. In September 2013, OpenCoin Inc. rebranded to Ripple Labs Inc, and began establishing relationships with financial institutions, the first revealed in early 2014 with the Fidor Bank in Munich. Since then, Ripple has established itself on the Federal Reserve’s Faster Payments Task Force Steering Committee where Ryan Zagone, Head of Regulatory Relations, contributes.

Asset details

100 billion XRP were created upon Ripple’s genesis. As of March 2018, Ripple Labs held approximately 60% of XRP’s total supply (60 Billion). 55 Billion XRP have been locked in a publicly visible escrow account to be released at a rate of 1 Billion per month, for 55 months. Ripple promises to add back to the escrow account any XRP not used by Ripple within that month.

To activate a Ripple account for participation on the Ripple network, the account must make an initial deposit of 20 XRP. Every utilization of the network, regardless the transaction type, must destroy a small amount of XRP as a transaction cost, deterring spam and DOS attacks. Ripple Labs promotes that XRP is the ideal cryptoasset to use for global payments due to faster settlement times at 4 seconds, while BTC settles at 1+ hours and ETH at 2+ minutes, and higher transaction throughput, at 1500 transactions per second (TPS) compared with BTC (3-6 TPS) and ETH (15 TPS).

Historically, Ripple has been criticized over the highly centralized nature of the project’s consensus, governance and XRP cryptoasset. The team addresses their plan for introducing increased decentralization over time, here.