Research Summary
The report provides a comprehensive analysis of the XRP Ledger (XRPL) and its native token, XRP. It covers key developments, including the Ripple SEC lawsuit ruling, the performance of XRP, the introduction of Hooks, a programmability solution, and the ongoing development of the EVM sidechain and XLS-38d bridge. The report also delves into the financial analysis of XRP, network analysis, ecosystem analysis, and the various sidechains in development or recently launched.
Key Takeaways
Ripple SEC Lawsuit Ruling
- Landmark Decision: The Ripple SEC lawsuit ruling in July confirmed that XRP is not a security. This decision led to an 11.9% QoQ and 59.9% YTD increase in XRP’s market cap, with spikes following the positive regulatory news.
Financial Analysis of XRP
- Market Performance: As of Q3’23, XRP is the fifth largest cryptocurrency by market capitalization at $27.8 billion. Its circulating market cap increased 11.9% QoQ, erasing the Q2 dip and returning to the same levels as the end of Q1. XRP’s market cap finished the third quarter up 59.9% YTD.
Network Analysis
- Network Activity: XRPL’s network activity metrics fell across the board in Q2. Average daily transactions declined 9.1% QoQ from 1.16 million to 1.06 million. Average daily active addresses took a larger decline, down 18.5% QoQ from 54,000 to 44,000.
Ecosystem Analysis
- Issued Currencies: The total market cap of fungible tokens, known as Issued Currencies, decreased 6.6% QoQ to $134.9 million. There are over 3,300 listed assets on the XRPL, but the top token, SOLO, accounted for 36% of the total market cap.
- NFTs: On the XRPL, NFTs are built into the core protocol and do not require smart contracts for creation or transfers. Average daily NFT transactions increased 7.3% QoQ to 16,700.
Sidechains
- Development and Launch: Multiple sidechains for the XRPL are either in development or have recently launched. These include Coreum, an enterprise-grade L1 focused on interoperability and scalability, Peersyst’s EVM sidechain, and the Root Network sidechain, a blockchain-based NFT system with a focus on UX and metaverse.
Actionable Insights
- Explore the Potential of XRP: With the Ripple SEC lawsuit ruling confirming that XRP is not a security, there may be potential for increased adoption and use of XRP. The positive regulatory news has already led to a significant increase in XRP’s market cap.
- Monitor Network Activity: Despite a decline in network activity metrics in Q2, the XRPL continues to be a significant player in the cryptocurrency space. Keeping an eye on these metrics could provide insights into the network’s health and potential future trends.
- Consider the Impact of Issued Currencies and NFTs: The decrease in the market cap of Issued Currencies and the increase in daily NFT transactions indicate shifting dynamics within the XRPL ecosystem. These trends could have implications for the broader cryptocurrency market.
- Assess the Potential of Sidechains: The development and launch of multiple sidechains for the XRPL could open up new use cases and opportunities. These sidechains could potentially enhance the functionality and utility of the XRPL.
