XRP’s role in the financial ecosystem has been the subject of ongoing debate. Ripple CTO Emeritus David Schwartz has now shared a thesis explaining how the asset derives its value.
A thread involving members of the XRP community touched on several points about XRP’s fee structure and its deflationary design. Commenters had been pressing Schwartz on whether those features directly influence XRP’s price. That exchange set the stage for Schwartz’s explanation.
The Core Thesis
Schwartz summarized his position plainly. “Low fees and reliable operation make XRPL a great place to move and hold value,” he wrote. “That drives value flow to XRPL. XRP captures some of that value because of its unique advantages over other assets on XRPL.”
The argument moves in a specific sequence. Low fees and reliable operation attract activity to the XRP Ledger. That activity generates value flow onto the network. XRP then captures a portion of that value through its structural advantages over other assets on the same ledger.
The thesis is this: Low fees and reliable operation make XRPL a great place to move and hold value. That drives value flow to XRPL. XRP captures some of that value because of its unique advantages over other assets on XRPL.
— David 'JoelKatz' Schwartz (@JoelKatz) October 23, 2026
Why XRP Specifically?
Schwartz’s thesis separates two things that often get conflated in community discussions. The first is the value of the XRP Ledger as a network. The second is the value of XRP as the asset native to that network. His argument is that the ledger’s usefulness drives demand, and XRP benefits from that demand due to unique properties on the ledger.
Structural Advantages
Schwartz is describing a utility-based mechanism. If the ledger becomes more active, more value flows through it. XRP, by virtue of its position on the ledger, stands to capture more of that value. The greater the ledger’s activity, the stronger the case for XRP’s demand.
Community Responses
After Schwartz published the post, responses came in quickly. One of the community members who promoted the response pushed back on the thesis, arguing it was incomplete. He suggested that a higher XRP price is a practical requirement for the ledger’s success, not just a byproduct of it.
The other commenter responded by noting that Schwartz had already addressed that concern. He also offered his own interpretation of what “capture” means in Schwartz’s thesis, suggesting it referred to XRP’s use as a liquidity bridge through auto-bridging.
Schwartz confirmed that auto-bridging is one example but clarified the mechanism extends further. He noted XRP is the only counterparty-free asset any account on the ledger can accept. He also noted that users must hold XRP to pay fees. These properties, he argued, all contribute to driving value and demand for the asset.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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