David Schwartz, chief architect of the XRP Ledger and Ripple’s CTO Emeritus, has firmly rejected one of the XRP community’s most requested features. Schwartz said he is “not a big believer” in native staking, and his explanation goes to the heart of why XRP is not a security.
“What Is The Source Of The Yield?”
At Ripple Swell, Schwartz said there are many reasons native staking is a bad fit for the XRP Ledger, but the biggest is simple: where would the yield come from?
His answer reaches back to the long debate over XRP’s legal status. He argued:
- Holding XRP does not make anyone an owner of the XRP Ledger
- XRP holders do not get to tax other people’s transactions
- The ledger is a public good that nobody owns
“Staking is like, that’s how companies work. That’s how securities work,” Schwartz said. “That’s not how commodities work.”
In his view, a network that pays holders out of other users’ activity starts to look like a company paying dividends to shareholders. That is exactly the structure XRP was designed to avoid.
“We Drank The Kool-Aid On Be Your Own Bank”
Schwartz also criticised where much of the crypto market has gone. Crypto’s founding idea, he said, was “be your own bank.” Today, he believes, too many projects want to be someone else’s bank, making money by skimming fees off other people’s transactions.
“We drank the Kool-Aid on be your own bank and everybody constantly is like, I want to be somebody else’s bank,” Schwartz said.
The XRP Ledger was built on a different idea:
- The people who use the network are its real stakeholders
- Fees stay low and throughput stays high
- Users make money from the products and services they build, not from charging the network’s other users
He compared it to running a normal business. A company does not profit from its payment system. It profits from what it sells, and the payment system should simply be cheap, fast and efficient.
Builders Can Still Charge Fees
Schwartz said nothing stops developers from building fee-earning businesses on top of the XRP Ledger. They can trade on its decentralized exchange, issue assets and serve their own customers. The difference, he said, is that “the ledger is not going to tax them for you.”
He acknowledged that sticking to the original vision while the rest of the market moved elsewhere makes the XRP Ledger better at some things and worse at others. The challenge now is to focus on where it has the edge.
“Crypto Was More Exciting 10 Years Ago”
Asked whether crypto was more exciting a decade ago, Schwartz said yes, at least for him. The hard technical problems that drew him in have largely been solved. What remains are problems of regulation, product-market fit and mass marketing.
He compared it to space travel: the thrill is going to the moon before anyone else has. Once the path is known, the challenge becomes funding and persuasion. Schwartz said that is why he now advises on technical questions instead of leading the work. He also said that new technical challenges remain, including defending against threats from AI and balancing privacy with security.