Ripple publishes the quarterly XRP market report to voluntarily provide transparency and regular updates on the company’s views on the state of the crypto markets, such as:
As an XRP owner, Ripple believes that proactive communication and transparency are part of being a responsible stakeholder. Additionally, Ripple urges others in the industry to build trust, encourage open communication, and raise the bar across the industry.
Summary of the crypto market
The NFT mania continued into the third quarter as more and more players entered the room. ETH was the main beneficiary of the madness as most of the NFT coinage and trading took place on or through platforms integrated with Ethereum. OpenSea has become a major NFT location, with a daily volume of over $ 100 million on a regular basis. Projects like CryptoPunks and Bored Ape Yacht Club saw incredible demand, resulting in multiple auctions at Sotheby’s. Activities began moving to the Solana blockchain in the middle of the quarter with the introduction of Sol Punks, a copy of Crypto Punks. While most of the activity remains on the Ethereum blockchain, other chains are starting to lose market share in the face of high gas fees. At the beginning of the year, 97% of Total Value Locked (TVL) was accounted for by all chains on ETH – by the end of the third quarter that number had dropped to 69%. Despite the London hard fork, gas fees on Ethereum still averaged $ 17.81 per transaction in the third quarter. A number of projects have also been started in the XRP Ledger (XRPL), including xPunks, Aesthetes and Bored Apes Club XRPL, which take advantage of the low transaction costs and high scalability.
The third quarter was also marked by the rise of the so-called “ETH killers” such as Avalanche, Solana and Terra as well as Layer 2 solutions such as Polygon, in which their native tokens reached new all-time highs. To encourage development, many have raised more than $ 100 million to incentivize activity on their blockchains.
Finally, digital asset prices bottomed out in the third quarter of 2021 when China’s crypto penetration peaked. Bitcoin’s hash rate decline bottomed out in early July and began to rise during the quarter as miners resumed operations in places like Kazakhstan and the BTC price.
Regulatory oversight is heating up
Increased regulatory scrutiny was another big issue this quarter. SEC Chairman Gary Gensler’s public comments continued to make it clear that, in his opinion, the crypto industry can best be described as “the Wild West.” He also said that crypto is trying to stay outside the regulatory system and that there is regulatory clarity for crypto markets. However, many – including other SEC commissioners, elected officials and market participants – have denied that traffic rules are still unclear as the agency continues to drive regulatory policy through enforcement. In addition, stablecoins remained in the spotlight and caught the attention of regulators for a lack of transparency regarding reserves and explosive market cap growth.
Update on the SEC lawsuit against Ripple
Last quarter, Ripple reached the conclusion of the fact-finding phase on 31. The case is currently in the expert-finding phase, with each side exchanging expert reports on various aspects of the case. In response to an SEC extension request, the court ordered the expert investigation to be completed by mid-January 2022. While the legal process may feel slow, Ripple has tried and will continue to rush the case as quickly as possible. .
Unprecedented growth in on-demand liquidity (ODL)
Ripple saw significant growth and strong pull from ODL, leveraging XRP to eliminate pre-financing, lower operating costs, and free up capital from a diverse cross-section of global customers for the best quarter in history. Legacy customers like SBI Remit, who once used RippleNet for pure fiat payments, turned on ODL to eliminate the need for pre-funded accounts. Customers have adopted ODL for treasury payments as well – as crypto liquidity has improved and the market has matured, the product is poised to support the larger payment volumes that are desirable for customers managing their internal treasury operations want.
The transaction volume (measured in dollars) via RippleNet has more than doubled since last year and ODL transactions are up 130% quarter on quarter. In the third quarter, ODL transactions accounted for ~ 25% of the total volume. All XRP sales this quarter are attributed to the growth and adoption of ODL.
ODL customers can send XRP for cross-border payments via third parties such as exchanges or directly via a crypto wallet. By using your wallet to obtain XRP On-Demand via Ripple, friction losses in the payment flow are reduced and an overall improved customer experience is offered. ODL customers can now send to over 20 countries around the world for their payment needs.
Disciplined, responsible stakeholders: Q3 Sales and Purchasing
For the most recent quarter, Ripple’s total XRP sales, net of purchases, were $ 491.74 million compared to $ 157.92 million in the previous quarter. Ripple continued to engage in sales to improve the ODL experience of certain customers, eliminate the need for pre-financing on exchanges, and enable instant global payments. As has been the case since the fourth quarter of 2019, Ripple has not made any programmatic sales this quarter.
Ripple’s total revenue after purchases ended the quarter at 26bps, or 0.26% of global XRP volume, according to CryptoCompare TopTier (CCTT) volume.
|Sales summary (Dollars to millions)||Q2 2021||3rd quarter 2021|
|Total ODL-related sales *||157.92||491.74|
|sales (less purchases)||157.92||491.74|
|Global XRP volume||Q2 2021||3rd quarter 2021|
|ADV XRP (Dollars to millions)||4,492.16||2,075.89|
|Total XRP volume (in billion dollars) **||408.80||189.53|
|Net sales in% of total volume||0.04%||0.26%|
* All ODL-related sales are attributed to the growth and adoption of ODL
** Note: The numbers were compiled using the CryptoCompare API for TopTier Daily Aggregate Volumes, which reflect the total XRP volume in dollars from exchanges that CryptoCompare lists in the TopTier.
Finally, in September 2021, Ripple officially made its final transfer of XRP to Jed McCaleb.
Certain wallets used for XRP sales also offer short term leases for market makers. This is worth noting as they are often mistakenly interpreted as sales by market participants. The leases will ultimately be returned to Ripple. The total outstanding leases in the third quarter of 2021 were XRP 48.3 million.
The third quarter was a sub-par quarter for the volume of most digital assets, including XRP. The average daily volume of XRP declined more than 50% this quarter, while the volume of ETH and BTC declined ~ 33% after CCTT. Altcoins such as BCH and LTC saw volume declines by more than 65% qoq. Only ETH competitors such as AVAX, LUNA and SOL saw their volumes grow from quarter to quarter as they hit new all-time highs.
In the third quarter of 2021, in accordance with the previous quarters and the official escrow agreement, three billion XRP were released from the escrow account (one billion per month). A total of 2.6 billion XRP were returned and then transferred to new trust agreements during the quarter. Further information on the fiduciary procedure can be found here. Note: All numbers are based on transactions that occurred during the quarter.
Update of the XRP market infrastructure
XRP expanded its presence in the derivatives infrastructure in the third quarter. AAX, a Hong Kong-based institutional exchange, launched a new XRP Perpetual in July, and Bitfinex followed suit in early September. ByBit has integrated a new XRP pair separately. Additionally, in July, Huobi began offering a new XRP Income Product that XRP holders can use to earn interest on their holdings.
XRP in DeFi
The XRP Ledger’s built-in decentralized exchange (DEX) was the very first DeFi application. Today there are a number of third-party initiatives expanding the use of the DEX – for example, non-custody wallets such as XUMM and trading platforms such as Sologenic and GateHub allow users to interact directly with the DEX of the XRP ledger.
XRP is currently available on other chains and DeFi platforms. An existing project, Kava.io, which has a TVL of nearly $ 400 million, allows users to trade, borrow, and lend XRPB (packaged XRP on Binance Chain BEP2). Other highly anticipated DeFi projects using XRP are being built on the Flare network, which launched its Songbird test network in September. One of these projects is Flare.Finance, an institutional DeFi platform.
Just as many cryptocurrencies are built on a multi-chain future, there are also a number of initiatives that aim to bring XRP directly into the Ethereum network in the coming months. This allows developers to build bridges between networks with complementary use cases while taking advantage of the XRP ledger.
Promotion of a tokenized future
RippleX’s Big NFT Move: Creator Fund
In September, Ripple unveiled its $ 250 million Creator Fund, which is helping creators, brands, and marketplaces explore new use cases for non-fungible tokens (NFTs) on the XRP ledger, using its innate benefits in terms of speed, cost and to use sustainability. The fund provides the financial, creative, and technical support YouTubers need to engage and ultimately deploy new NFT use cases. Ripple has partnered with NFT marketplaces and creative agencies that integrate with the XRP ledger to provide developers with a seamless NFT experience and to help creators and brand customers create their NFTs.
Ripple Inks CBDC partnership
Ripple announced a partnership with the Royal Monetary Authority of Bhutan in September to test a central bank digital currency (CBDC) using Ripple’s CBDC solution. This move is being driven by the country’s desire to improve digital and cross-border payments, expand financial inclusion efforts and expand its commitment to sustainability as the only carbon negative country in the world.
Build with the XRP Ledger Developer Community
XRP Ledger on-chain activity is showing strong numbers
In the last quarter there were a total of 88.8 million transactions in the XRP ledger with 69.3 billion US dollars, which were processed over a volume of 74.5 billion XRP. As developers continue to build on the XRP ledger, there are hundreds of projects addressing various use cases including:
- XRPhone enables users to pay merchants with XRP
- Nebeus offers crypto-supported credit services, wallet functionality and payment transfers
- NFT Riddler allows users with XRP to bid on NFTs
In September, RippleX released a developer preview for Federated Sidechains, which allows developers to create their own sidechains while taking advantage of the benefits and features of the public XRP ledger. With Federated Sidechains, developers can add new functionality to the XRP ledger protocol, develop new use cases – such as smart contracts and DeFi functions – and roll them out into production without waiting for mainnet adoption. Last quarter, Ripple co-hosted Apex: the XRPL Developer Summit along with the XRP Ledger Foundation, where David Schwartz announced RippleX’s commitment to building an Ethereum Virtual Machine (EVM) sidechain that provides a compatibility layer for Ethereum-based smart contracts on the XRP enables ledger network.
In the coming months, developers can look forward to the following milestones on the Federated Sidechain:
- November 2021: RippleX proposes to implement federated sidechains in the XRP Ledger Mainnet in the version XRP Ledger v1.8.
- H1 2022: RippleX introduces developer tools to easily create, launch, and test federated sidechains and track cross-chain transactions.
XRPL grant program
Last quarter, the first wave of XRPL grant recipients received a total of nearly $ 2 million from more than 10 countries around the world. The program is sponsored by RippleX and supported by others in the community such as XRPL Labs. The first two funding waves are designed to inspire use cases related to NFTs, tokenization, and federated sidechains.