XRP Ledger: A Quarter of Growth and Milestones
A recent report from Messari reveals the current status of the XRP Ledger (XRPL) and its noteworthy performance in the fourth quarter of 2023.The market cap of XRP Ledger (XRPL) token increased by 47% in the fourth quarter, reaching $169 million. So, what caused this surge?
A recent report by Messari has provided valuable insights into the state of the XRP Ledger (XRPL) during the fourth quarter (Q4) of 2023. The report covers significant milestones, including the market capitalization of the native token, distribution, burning mechanism, price movement, legal battle, and network activity.
Distribution of 4 Billion XRP Contributes to Market Cap Growth
In Q4 2023, XRP, the native token of the XRPL, emerged as the sixth-largest cryptocurrency by market capitalization, reaching an impressive $33.7 billion. The token’s circulating market cap witnessed a substantial 21.2% increase quarter-over-quarter (QoQ) and an impressive 93.6% growth year-over-year (YoY).
The increase in market capitalization was primarily attributed to the distribution of 4 billion XRP, coupled with a significant price spike on November 13, when the token reached as high as $0.7503.
Throughout 2023, a total of 4 billion tokens were distributed, accounting for 8% of the XRP supply from the end of 2022. While this distribution contributed to the increase in market cap, it was overshadowed by the impact of the price spike.
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Additionally, the XRPL employs a transaction fee-burning mechanism, which applies deflationary pressure to the total supply of 100 billion XRP. However, the low transaction fees on the network have resulted in a relatively low burn rate of approximately 12 million XRP since the inception of the XRP Ledger.
Network Activity Shows Mixed Trends in Q4 2023
Q4 2023 marked a significant turning point for XRP as it concluded a multi-year legal battle with the US Securities and Exchange Commission (SEC). In July 2023, the district court ruled that XRP is not considered an investment contract or a security, distinguishing it from many other blockchain assets.
This legal victory triggered a surge in XRP’s price, with an increase of over 70% on July 14 and a peak of $0.82 on July 20. The subsequent relisting of XRP on major cryptocurrency exchanges further bolstered its position.
Although network activity on the XRPL displayed mixed trends in Q4, with a decrease in active addresses by 31.3% QoQ, there was a 22.7% increase in transactions. Notably, a significant portion of transaction activity originated from a group of accounts sending transactions to a single account for inscription-related activity. The number of accounts on the XRPL increased by 188,000, reaching 5.00 million in Q4.
Overall, the Q4 2023 report on the XRP Ledger showcases its growth, driven by factors such as price spikes, legal victories, and network activity. With its expanding market capitalization and increasing adoption, XRP continues to solidify its position in the cryptocurrency market.
🤔 Q&A Content
Q: How does the distribution of XRP tokens contribute to its market capitalization growth?
A: The distribution of XRP tokens plays a significant role in the growth of its market capitalization. In Q4 2023, the distribution of 4 billion XRP contributed to the increase in market cap. However, it is important to note that the distribution was overshadowed by the impact of a significant price spike, which had a more substantial effect on the market capitalization.
Q: What is the burning mechanism of XRP tokens?
A: The XRPL employs a transaction fee-burning mechanism, which applies deflationary pressure to the total supply of 100 billion XRP. However, the low transaction fees on the network have resulted in a relatively low burn rate since the inception of the XRP Ledger.
Q: How did the legal battle with the SEC affect XRP’s price?
A: The conclusion of the multi-year legal battle with the SEC had a positive impact on XRP’s price. In July 2023, the district court ruled that XRP is not considered an investment contract or a security, distinguishing it from many other blockchain assets. This ruling led to a surge in XRP’s price, and its subsequent relisting on major cryptocurrency exchanges further bolstered its position.
Q: What were the trends in network activity on the XRPL in Q4 2023?
A: Network activity on the XRPL displayed mixed trends in Q4 2023. While there was a decrease in active addresses by 31.3% QoQ, there was a 22.7% increase in transactions. Notably, a significant portion of transaction activity originated from a group of accounts sending transactions to a single account for inscription-related activity. The number of accounts on the XRPL increased by 188,000, reaching 5.00 million in Q4.
📚 References: 1. Messari Report on XRP Ledger 2. Crypto CEO Says Get Ready For Solana To ‘Rally Higher Again’ With New Target 3. Consensys Designs New Smart Routing Mechanism to Streamline Metamask Transactions 4. Bitcoin Flies Above $47,300, But Watch Out For Extreme Greed 5. Ripple (XRP) Price Analysis 6. Ripple (XRP) Price Charts 7. XRP Ledger 8. XRP Ledger News: US District Judge Grills SEC CoinBase Lawyers to Determine if Crypto Transactions Constitute Investment Contracts
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