XRP News: Ripple CTO Reveals Shocking 30-40% Drop in On-Chain Volume Due to Off-Chain Settlements

Ripple CTO explains XRP Ledger on-chain volume drop due to off-chain settlements

In a surprising revelation, Ripple’s Chief Technology Officer David Schwartz has addressed the significant 30-40% decline in XRP Ledger on-chain volume. This development raises crucial questions about XRP’s real-world utility and institutional adoption. Let’s dive deep into what this means for the cryptocurrency’s future.

Why Has XRP Ledger On-Chain Volume Dropped 30-40%?

Ripple’s Q1 2025 XRP Markets Report showed a concerning trend:

  • 30-40% reduction in on-chain XRPL activity
  • Decreased new wallet creation
  • Lower overall transaction volume

Schwartz attributes this primarily to Ripple’s strategic shift toward off-chain settlements with financial institutions. While this approach offers efficiency benefits, it comes at the cost of blockchain transparency.

The Off-Chain Settlement Controversy

Critics like entrepreneur Andrei Jikh question Ripple’s claims of institutional adoption without verifiable on-chain data. Key challenges include:

Challenge Impact
Regulatory compliance Institutions prefer private settlements
Terrorism financing risks Limits use of XRPL DEX
Transparency issues Hard to verify transaction volumes

XRP Ledger DeFi Shows Resilience

Despite the overall decline, decentralized exchange volume only dropped 16% quarter-over-quarter. However, with just $81.8 million TVL on XRPL DeFi apps, institutional activity remains largely invisible on-chain.

What’s Next for XRP and Ripple?

Schwartz hinted at potential changes:

  • Possible shift toward more on-chain transactions
  • Development of “permissioned domains” for compliance
  • New transparency measures as Ripple discontinues current XRP Markets Reports

FAQs

Q: Why is on-chain volume important for XRP?
A: On-chain activity provides transparent verification of XRP’s real-world usage and adoption.

Q: Will Ripple completely move away from on-chain transactions?
A: No, Schwartz suggests institutions may gradually shift more activity on-chain as they recognize blockchain benefits.

Q: How does this affect XRP investors?
A: The trend highlights the tension between institutional adoption and blockchain transparency, potentially impacting market perception.

Q: What are permissioned domains?
A: These would allow controlled access to XRPL features while maintaining compliance, though details remain scarce.

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