XRP
Crypto Overview
Overview and Intended Utility
XRP is the native digital asset of the XRP Ledger, created by Ripple Labs to facilitate fast, low-cost cross-border payments and serve as a bridge currency for financial institutions. The primary intended utility is to provide liquidity for Ripple's payment network, RippleNet, enabling near-instant settlement of international transactions.
Business Model Analysis
Ripple's business model focuses on partnering with financial institutions to improve the traditional correspondent banking system. The company has developed three main products: xCurrent (payment processing), xRapid (now RippleNet ODL - uses XRP for liquidity), and xVia (payment interface).
Real-World Adoption
XRP has achieved significant adoption among financial institutions, with over 300 customers including MoneyGram, Santander, and American Express. The network processes millions of transactions, with daily volumes averaging $1-2 billion. ODL (On-Demand Liquidity) transactions have grown substantially, particularly in corridors like USD-MXN and USD-PHP.
Token Distribution
Ripple Labs initially created 100 billion XRP tokens, with approximately 48% currently in circulation. Ripple holds a significant portion in escrow, releasing 1 billion monthly with unused portions returning to escrow. This controlled distribution has raised some concerns about centralization.
Development Activity
The XRP Ledger maintains active development with regular updates and improvements. The ecosystem has expanded to include smart contract capabilities through the XRP Ledger Hooks amendment and Layer-2 solutions like Flare Network.
Revenue Model Assessment
XRP's revenue model does not involve interest-bearing mechanisms or lending. The primary value proposition comes from facilitating faster, cheaper cross-border payments and serving as a bridge currency.
Crypto Impact
To assign a comfort level investing in XRP from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to XRP.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
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Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
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