On December 2, the XRP Ledger implemented a significant update, reducing its reserve requirements by 90%. With this, new users can now fund their wallets with just 1 XRP, instead of the previous 10 XRP.
Critics argued that the previous requirement slowed adoption
The change in reserve, effective at 22:45 UTC, was confirmed on X by an anonymous XRP validator operator.
The goal of the halving is to make the blockchain more accessible to users, especially those discouraged by the high initial reserve. Additionally, it also allows users to spend XRP that was previously locked in reserve accounts.
The primary purpose of the reserve system is to prevent spam accounts and excessive ledger growth, as outlined in the XRP Ledger documentation. However, critics argue that the previous requirement slowed adoption, prompting developers to push for changes.
The initiative to reduce the reserve began in October, with XRP Ledger developer WietseWind announcing on October 16 that XRPL Labs nodes had been configured to vote in favor of a lower reserve requirement.
Ripple Labs faces SEC as XRP continues to appreciate
In short, the decision to reduce reserves reflects a broader effort to increase accessibility and attract new users, which are essential elements for the expansion of the XRP Ledger ecosystem.
This reserve drawdown comes during a period of intense activity for XRP, with the cryptocurrency rising to 2.65 USD, its highest level since February 2018. This resurgence is in line with optimism surrounding the broader cryptocurrency market and the ongoing legal battles involving Ripple Labs, the founding team behind XRP.
Ripple Labs has been embroiled in a legal dispute with the US Securities and Exchange Commission (SEC) , which claims that XRP should have been registered as a security.
Ripple has disputed the allegations, appealing a 125 million USD fine imposed as part of the litigation. Despite these challenges, XRP continues to appreciate, reflecting investor confidence in its long-term prospects.
XRP becomes the third largest crypto in the world
Furthermore, XRP surged 30% on Monday and surpassed USDT to become the third-largest cryptocurrency by market cap.
Trading at 2.57 USD at press time, the token’s value has increased by 77% in a week and over 375% in the past month, with its market cap reaching 147 billion USD.
This growth comes after the token surpassed Solana in market capitalization over the weekend.
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