In a recent post, Dr. Artur Kirjakulov brought attention to a critical issue facing the XRP Ledger (XRPL) ecosystem: reserves. According to Kirjakulov, the reserve requirements on XRPL are significantly hindering user activity, locking away a substantial amount of funds that could otherwise be put to productive use. But this isn’t just speculation—he has data to back it up.
The Raw Data
Kirjakulov’s analysis is based on the data from September 2024, which highlights the extent of the problem:
• 10,082 users participated on the XRPL.
• Collectively, they held 29 million XRP in their wallets.
• 707,000 XRP, or approximately 2.5%, is locked away as reserves.
While this percentage may seem small, it has a considerable impact on users, particularly because only 50 users hold 50% of the total XRP. For the majority, the effect is even more pronounced, as reserves are eating into their limited funds.
A Typical User’s Wallet
The typical user on XRPL doesn’t hold vast amounts of XRP. According to the data, the average user holds:
• 62 XRP in total.
• Of this, 24 XRP is locked in reserves.
This means that 38% of a typical user’s balance is unavailable for economic activity. With such a limited amount of XRP to work with, these users find themselves unable to interact fully with the ecosystem—whether it’s engaging with dApps, placing orders, or participating in other activities.
Where Are These Reserves Going?
The reserves are not just locked into one aspect of the XRPL but are spread across various functions:
• 57% of reserves are locked in trust lines.
• 14% is locked by wallet activation, with only partial recovery possible through wallet deletion.
• 7% is locked in orders.
While most of these reserves are refundable, they reduce the amount of XRP users can actively use, affecting overall ecosystem engagement.
The Call for Change
Kirjakulov makes a compelling case for lowering XRPL reserves. He argues that the current reserve structure not only discourages new users but also hinders existing users from fully participating. Lowering reserves could lead to:
• Reduced entry barriers for both users and businesses.
• Increased ecosystem interaction, as users would have more XRP available.
• Technical improvements, reducing user frustration with reserve-based limitations.
He highlights that XPMarket has already started voting on lowering the reserve requirement, with their vote visible via XRPL scan. Kirjakulov is calling on validators and Ripple itself to support this initiative, as it could be a crucial step in ensuring the long-term success of the XRPL ecosystem.
Conclusion
The data speaks for itself. Reserves on the XRPL are proving to be a significant barrier, especially for typical users with limited XRP balances. By lowering these reserve requirements, the ecosystem could see a boost in activity and innovation, benefiting both users and developers alike. As the vote on reserve reduction moves forward, it’s clear that this is a business-critical issue that requires immediate attention.
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