Analyst Calls XRP “Biggest Financial Scam”, Ripple CTO Responds

A recent claim labeling XRP as the “biggest financial scam” has sparked debate within the cryptocurrency community, prompting a direct response from Ripple’s Chief Technology Officer (CTO), David Schwartz. Analyst Aylo, a researcher for blockchain platform Alpha Please, criticized XRP, arguing that the asset’s market capitalization of approximately $140 billion does not reflect its real-world utility. His primary concern stemmed from the relatively low volume recorded on the XRP Ledger’s decentralized exchange (DEX).

Ripple CTO Addresses Concerns Over XRP DEX Volume

Aylo pointed to data from DeFiLlama indicating that the XRPL’s DEX saw only $44,000 in trading activity over 24 hours. He argued that this was uncharacteristic for a cryptocurrency with XRP’s market size and questioned its overall value. Additionally, he highlighted that the XRPL’s total value locked (TVL) was just $80.63 million—significantly lower than blockchain networks with well-established decentralized finance (DeFi) ecosystems.

In response, David Schwartz addressed Aylo’s concerns, stating that the reported trading volume likely only considered Automated Market Maker (AMM) transactions, which represent only a fraction of XRPL’s activity. He clarified that AMM functionality was only recently integrated into the XRPL in March 2024, making it an emerging feature rather than a defining aspect of the network.

Validator Disputes Low Volume Claim with Higher Figures

Following Schwartz’s response, Vet, a validator on XRPL’s dUNL (decentralized Unique Node List), contested Aylo’s assessment by presenting alternative volume figures. He stated that XRPL’s actual 24-hour DEX volume was closer to $9 million, significantly higher than the $44,000 cited in Aylo’s argument.

Vet further noted that DeFiLlama’s data might not fully capture XRPL’s trading activity. He revealed that he and Orchestra Finance had collaborated with DeFiLlama’s team to improve data integration, ensuring that both AMM and Central Limit Order Book (CLOB) transactions were accounted for. When combined, these figures reflect a more accurate representation of XRPL’s trading volume.

Why Is XRPL’s DEX Volume Relatively Low?

Despite the revised estimate of $9 million in DEX volume, XRPL still lags behind other major blockchains, including Ethereum ($1.44 billion), Solana ($1.087 billion), and Binance Smart Chain ($2.61 billion). However, analysts attribute this discrepancy to XRPL’s historical focus on cross-border payments rather than DeFi. Unlike networks that have prioritized DeFi development for years, XRPL only recently introduced DeFi-related features such as AMMs, NFTs, and stablecoins.

Additionally, some industry observers argue that DEX volume alone is not an accurate measure of a blockchain’s overall legitimacy or success. Bitcoin, for instance, has a market capitalization exceeding $1 trillion, yet DeFiLlama reports that its 24-hour DEX volume is only $238,740. This suggests that a blockchain’s value cannot be assessed solely based on DEX activity.

Misinterpretation of the Token’s Trading Volume

The debate over the token’s trading volume also led to some confusion, with certain individuals mistaking Aylo’s argument as a criticism of XRP’s total trading activity rather than its DEX volume specifically. Data from CoinMarketCap shows that XRP’s global 24-hour trading volume stands at approximately $3.14 billion, a figure more aligned with its market capitalization.

While discussions surrounding XRP’s utility and adoption continue, the recent exchange highlights the complexities involved in evaluating a cryptocurrency’s value based on DEX metrics alone. As XRPL expands its DeFi ecosystem, its trading volume on decentralized platforms may grow over time.

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 urged to do in-depth 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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