Ripple’s Chief Technology Officer Emeritus, David Schwartz, provided one of his clearest explanations yet for why XRP’s value should rise if the XRP Ledger (XRPL) succeeds. He argues that even in a world where Bitcoin dominates global settlement, this token would still find its role.
“Even if you imagine a world where nearly all settlements use Bitcoin,” Schwartz wrote on X, “a successful XRPL would likely host several different versions of wrapped or bridged Bitcoin, and XRP would capture value by acting as a bridge between them.”
Controversial discussion
Schwartz’s comment appeared in a heated debate on X about what truly drives the price of XRP. XRP commentator Saul argued that the XRPL’s design of burning transaction fees was intended to prevent validators from being compensated for block production, not to boost price. He stated that this deflationary effect from extremely low fees has little direct impact on price. Another user disagreed, saying this burning is an intentional design choice and accused Saul of not understanding the ledger.
Schwartz's core argument
Schwartz then summarized his view in one sentence: Low fees and reliable operation make XRPL an excellent place to transfer and store value, attracting value to the network, and XRP, due to advantages on the ledger that other assets lack, is able to capture a portion of that value.
Three reasons XRP captures value
According to Schwartz, XRP has several built-in advantages on the XRPL:
- Bridged liquidity: XRP connects trading pairs through automatic bridging, as mentioned by Saul and endorsed by Schwartz.
- No counterparty: It is the only counterparty-free asset that an XRPL account can accept.
- Fees: Users must hold XRP to pay for network transaction fees.
“All of this can help drive value and demand,” Schwartz wrote.
The only scenario in which XRP could fail
Schwartz stated that it is “highly unlikely” for XRPL to achieve success in financial applications while demand for XRP itself remains low. He believes the only scenario in which this could occur is if the world ultimately ends up with a single, completely dominant settlement asset—but he also considers this scenario unlikely.
Even so, his example of Bitcoin shows that XRP would still retain a role: as long as multiple versions of the dominant asset's wrapped form exist on the XRPL, XRP can serve as a bridge between them.
What does this mean for XRP holders?
Schwartz’s argument ties XRP’s long-term value to the actual adoption of the XRP Ledger, rather than relying solely on fee burns or speculation. His assessment assumes that the XRPL will secure a place in real-world financial activities—an unresolved challenge still facing the network.