As a recent Messari report As shown, the XRP Ledger (XRPL) showed significant progress in the first quarter of 2024. The decentralized public blockchain, which facilitates the transfer of XRP, fiat currencies and other digital assets, showed significant activity.

XRP ledger burn rate slows amid low fees

In the first quarter of 2024, XRP, the native token of XRPL, secured its position as the sixth largest cryptocurrency by market capitalization, reaching $34.1 billion ($29 million today). Despite the slight price decline, XRP market capitalization traded recorded growth of 1.3% quarter-on-quarter (quarter).

XRPL uses a deflationary mechanism by systematically burning transaction fees. This process puts downward pressure on the total supply of XRP, which stands at 100 billion tokens.

Since the inception of the XRP ledger, approximately 12 million XRP have been burned. However, low burning rate in the first quarter can be attributed to the network’s relatively low transaction fees (less than $0.002 per transaction).

Additionally, 1 billion XRP is released from escrow to Ripple every month, and any unused tokens are placed into novel escrow contracts. This pattern will continue until the remaining approximately 45 billion XRP becomes liquid; at this point, the main variable affecting supply will be deflationary pressure from burned fees.

While the price of XRP declined slightly by 0.1% q/q, lagging the overall cryptocurrency market growth of 63.0%, it increased by 14.8% year-on-year (y/y)..

Inscription-driven transactions power daily XRPL payments

The report highlights that XRPL revenues are measured as total fees collected by the network, which are then burned, contributing to the redistribution of wealth from those spending transaction fees to XRP holders. Network activity showed significant growth, with lively addresses and transactions increasing by 37% and 113% q/q, respectively.

A significant part of transactions on XRPL resulted from inscriptions, a type of transaction popularized at the beginning of 2023. More than 30 million transactions from approximately 45,000 accounts conducting subscription-related activities were transferred to one account.

According to Messari, the inscriptions enabled by XRP Script have played a key role in fueling the growth in numbers daily paymentswhich increased by 350% quarter-on-quarter to 2 million transactions.

Finally, the report noted that the XRP Ledger blockchain saw a net raise of 150,000 accounts, resulting in a 3.1% raise in total accounts to 5.15 million in the first quarter.

However, novel addresses decreased by 12.4% q/q. to 183,000, primarily due to the enormous number of addresses created in the fourth quarter, coinciding with the commencement of inscription activities.

At the time of publication of the article, XRP is trading at $0.5279, down 2.5% over the last 24 hours and 3.5% over the last seven days, which is in line with the broader market trend.

Featured image from Shutterstock, chart from TradingView.com