XRP is the native cryptocurrency of XRP Ledger, which is an open-source, public blockchain designed to facilitate faster and cheaper payments.

Sending payments overseas using the legacy financial system typically takes one to four business days and can be expensive. If a person uses XRP as a bridging currency, it’s possible to settle cross-border transactions in less than five seconds on the open-source XRP Ledger blockchain at a fraction of the cost of the more traditional methods.

The original founders pre-mined (created at the time of the ledger’s launch) 100 billion XRP tokens in 2012. This is all the XRP in existence, and no more XRP can be created. The founders provided Ripple with 80 billion tokens to fund future operations and development, while the founders divided the remaining XRP among themselves.

Unlike bitcoin and other mined cryptocurrencies, where new coins enter the market in the form of block rewards, XRP enters circulation whenever Ripple decides to sell coins from its pre-mined stash on the secondary market.

In 2017, the company transferred 55 billion of its 80 billion XRP tokens into an escrow account from which it could sell a maximum of 1 billion tokens per month on the secondary market. Ripple did that to improve the transparency and predictability of XRP sales. XRP held in escrow are “undistributed” whereas the rest (including XRP held by Ripple in wallets) is distributed (i.e. circulating supply).

At the end of each month, unsold tokens are returned to escrow and re-distributed at a later period. Over the last 32 months, 32 billion XRPs have been released from escrow, and 26.7 billion have been returned.

As of January 2022, the escrow account holds 46.5 billion XRP tokens. Ripple publishes the data on its website.

In the three and a half years following the launch of XRP in 2012, its price experienced two significant jumps, including in December 2013 when XRP’s price surged almost 11-fold in 15 days and then one year later, when the price soared 454% in 33 days.

After that, XRP’s price remained under $0.01 until the crypto market began to build momentum in early 2017. Between March 22, 2017, and Jan. 8, 2018, XRP’s price went parabolic in line with bitcoin and other cryptocurrencies at the time, rising by more than 51,000% from under one cent to a height of $3.40.

XRP failed to maintain its momentum above the $3 level, and in a few months, the price fell to $0.10. XRP price remained beneath that level until April 2021, when the broader crypto market began to rise again. That month, XRP price reached a year-to-date high of $1.98. The surge, however, was short-lived, and the price tumbled to less than $1.

The XRP Ledger is a permissionless network of peer-to-peer servers that powers XRP operations.

XRP is the native token and is intended to act as a “bridge” between hard-to-match fiat currencies. So if, for example, there are no market makers on the network willing to trade shekels for shillings, one can sell the shekels for XRP and then use XRP to buy shillings.

The XRP ledger uses the Federated Consensus algorithm, which differs from proof-of-work and proof-of-stake mechanisms in that network participants are known and trusted by other participants. Unlike miners, they are not rewarded for securing the network.

Once validators agree, a new block – a “ledger version” – is created and validated. The block’s content cannot be changed. That allows servers in the network to store a complete history of the ledger state.

In order to access the XRP Ledger, connected applications can use HTTP or WebSocket APIs. They can also use a library, available for a variety of programming languages, including Java, JavaScript, Python and more. That ledger is “open source,” meaning its software code is open to the public.

XRP is also used to provide on-demand liquidity (ODL) for Ripple’s flagship RippleNet service – a global payments network of financial institutions that was originally three separate products prior to 2019, including xCurrent ( a real-time settlement system), xRapid (a liquidity product) and xVia (a payment application programming interface.)

ODL is simply the process of exchanging one fiat currency, say U.S. dollars, for XRP tokens, sending those tokens to a receiving account that then exchanges the XRP for their local fiat currency, say, Philippine pesos. Unlike fiat currencies that can take days to send, XRP transactions usually take around 3 seconds.

According to XRPL’s XRP documentation, the ledger settles payments in under five seconds and can handle more than 1,500 transactions per second. A small amount of XRP – about 10 drops (a unit of XRP) worth 0.00001 XRP – is destroyed to cover transaction fees. The transaction cost is designed to increase along with the load of the network to disincentivize using the network during busy periods. All XRP transactions are executed and settled on the ledger.

XRP is the native asset of the XRP ledger, a blockchain originally developed in 2011 by developers Arthur Britto, Jed McCaleb and David Schwartz.

The protocol was officially launched in 2012, and soon after that, the team formed a new company called OpenCoin that was led by Chris Larsen who joined as CEO. The following year, the company changed its name to Ripple Labs before shortening it, for marketing purposes, to Ripple in 2015.

Ripple and XRP are two distinct entities. Ripple is a fintech company that builds global payment systems, while XRP is an independent digital asset that can be used by anyone for a variety of reasons including to send remittances or make online payments.

Former Yahoo executive Brad Garlinghouse was appointed as Ripple’s first chief operating officer in 2015. A year later, Garlinghouse was promoted to the role of CEO.

In 2020, Ripple was charged by the U.S. Securities and Exchange Commission on the grounds that the company illegally raised $1.38 billion in unregistered securities offerings. The case has yet to reach a conclusion.