XRP reduces the reserve fee by 90%, which allows small new wallets
XRP Ledger reduced its base reserve requirements from 10 XRP ($25.60 at the current XRP price) to 1 XRP ($2.56) on December 2, blockchain data shows. This new network allows users to fund their wallets with minimal amounts of cryptocurrency, potentially lowering the barrier to adoption. It also allows users to spend a certain amount of XRP that they need to keep in reserve.
XRP Ledger reduces base reserve requirements
The backup change occurred at 10:45 PM UTC. Announced on X by the fake XRP (XRP) validator operator V
Source: VET
The owner reserve also decreased from 2 XRP ($5.12) to 0.2 XRP ($0.51). This means that users have to keep 0.2 XRP in their account for every transaction. According to XRP Ledger documentation, objects can include non-perishable tokens (NFTs), lines of trust, signer lists or owner directories. Some oracles are also considered goods and require proprietary protection.
The purpose of the backup was to prevent the size of the registry from increasing beyond the storage capacity of the nodes. Developers want to prevent the creation of spam accounts that do not have a small amount of XRP in them. Therefore, they created a reserve requirement of 10 XRP to prevent this. However, it has been criticized by some developers who say that the high reserve has hindered the acceptance of the network.
Developers weigh the pros and cons of low reserves.
On October 16, XRP Ledger developer WietseWind announced that all nodes owned by the XRPL Labs development team were configured to run minimum reserve requirements, allowing them to vote for the change.
In the post, WietseWind acknowledged some weaknesses of the minimum reserve requirement. “The first concern is the increase in activity on the registry to the point where the infrastructure is challenging,” he said. However, he says this is a “good problem to have” because it can only happen if there are lots of users and activity. Engineers say they can handle the extra stress on the network and are looking for ways to deal with it.
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Although the change was implemented on XRPL Labs nodes on October 16th, changing the backup requirement required both a validator reset and a vote from all validators, which was not implemented until December 2nd.
Election optimism and SEC battle boosts XRP
The change comes at a time when XRP Ledger's native coin is growing rapidly. Before Donald Trump was elected President of the United States, XRP was worth less than a penny per coin. Since the election, it has risen to $2.65, its highest level since February 2018.
XRP's founding development team, Ripple Labs, has been fighting the US Securities and Exchange Commission for years. The SEC says XRP is legally a security and should have been registered with the SEC, but Ripple says it isn't. Ripple was fined $125 million in the lawsuit and is appealing the verdict.
Related: Ripple files Form C, appeals SEC ruling on XRP institutional sale
