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In a recent report by market intelligence firm Messari, the XRP Ledger (XRPL) demonstrated notable resilience and growth during the first quarter (Q1) of the year.
By the end of March, XRP, the native token of the XRPL, held the position of the fourth-largest cryptocurrency by market capitalization, valued at $121.6 billion—a modest 2% increase quarter-over-quarter (QoQ).
Key Legal Decisions And Political Backing For XRP
Per the report, While XRP’s price saw a slight uptick of 0.5% during the same period, the increase in circulating supply by 1.4% contributed to the disparity between the market cap and price.
The environment surrounding XRP has been significantly influenced by recent political developments. On March 2, US President Donald Trump announced via his Truth Social account that his Executive Orders on Digital Assets included directives for a Crypto Strategic Reserve that encompasses XRP, SOL, and ADA.
This endorsement may bolster XRP’s legitimacy in the eyes of investors. Additionally, Ripple’s decision to drop its cross-appeal in the ongoing legal battle with the SEC marks a pivotal moment.
Following a ruling by US District Court Judge Analisa Torres, which determined that Ripple’s programmatic sales of XRP did not violate federal securities laws, the company agreed to a settlement involving a $125 million fine, with some funds to be returned to Ripple.
Deflationary Pressure
The burning mechanism on the XRPL, where transaction fees are systematically removed from circulation, continues to apply deflationary pressure on the total supply of XRP, which is capped at 100 billion.
Since the XRPL’s inception, approximately 13.8 million XRP, valued at around $28.7 million, has been burned. However, this low burn rate is countered by the monthly release of 1 billion XRP from escrow to Ripple, maintaining liquidity in the market while ensuring that any unspent XRP is returned to new escrow contracts.
Despite XRP’s market cap remaining relatively stable, it has outperformed the combined market capitalizations of Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), which collectively dropped by 22% in the same period. Remarkably, XRP’s circulating market cap has surged by 252% year-over-year.
Transaction Activity Soars
The XRPL also saw positive growth in key network metrics, with average daily active addresses increasing by 142% to 134,600, reflecting a surge in both new and existing users. New addresses grew by 12% QoQ, marking a 210% increase year-over-year.
In terms of transaction activity, the XRPL is experiencing an interesting dynamic: for the fourth consecutive quarter, active receiver addresses surpassed active sender addresses.
This indicates a growing number of wallets receiving tokens, potentially driven by community engagement strategies such as airdrops. For instance, in January, Galxe introduced its XRP Earndrop, distributing rewards to incentivize participation.
Total daily transactions on the XRPL increased by 13% to an average of 2.04 million, with payment transactions rising by 36% to 1.12 million.
Looking ahead, Ripple has announced plans to introduce native smart contracts to the XRPL, a move that could enhance the platform’s functionality.
This initiative aims to allow developers to customize existing XRPL features without the need for full smart contracts, starting with “Smart Escrows” designed to implement custom release conditions.
Featured image from DALL-E, chart from TradingView.com
