XRPL System Overview
Sovereign Assets • Layer 1s • Payment Networks
consensus ledger, IOUs, and issued assets
XRPL System Overview — The XRP Ledger (XRPL) is a high-speed, low-fee, decentralized blockchain built for payments and token issuance. Unlike Ethereum or other smart contract chains, XRPL uses a unique consensus model (not Proof of Stake or Work) based on validator agreement through a Unique Node List (UNL). XRPL natively supports custom token creation, NFTs, and decentralized exchange functionality — all without requiring smart contracts.
Use Case: A tokenization company issues gold-backed tokens on XRPL using trust lines. Users can trade these tokens on the native DEX, convert to XRP, or redeem for physical metal — all with 3-5 second settlement and near-zero fees, without smart contract complexity.
Key Concepts:
- Unique Node List (UNL) — Trusted validator set that reaches consensus on transactions
- IOUs — Issued tokens representing value held by a gateway or issuer
- Trust Lines — User consent mechanism to hold assets from specific issuers
- Native DEX — Built-in exchange functionality at protocol level
- XLS Standards — XRPL’s token and NFT standards (XLS-20 for NFTs)
- Transaction Finality — 3-5 second irreversible settlement
- $XRP — Native asset for fees, reserves, and bridge liquidity
- Ripple Labs — Company that developed the XRP Ledger
- Consensus Mechanism — XRPL’s unique federated consensus protocol
- Validator Node — Nodes participating in consensus
- NFT — Native NFT support via XLS-20 standard
- AMM — Automated Market Maker pools built into XRPL
- XRPL Issued Asset — Custom tokens created via trust lines
- Cross-Border Payments — Primary use case for XRPL infrastructure
Summary: The XRP Ledger is purpose-built for payments and tokenization, offering capabilities that other chains require smart contracts to achieve. Its native DEX, trust line system, NFT standards, and AMM functionality make it a complete financial infrastructure layer — with the speed and cost efficiency needed for real-world adoption.
Core Features of XRPL
built-in capabilities without smart contracts
• Transaction fees (burned)
• Wallet activation reserve
• Bridge currency liquidity
• Deflationary by design
• 100B max supply (decreasing)
• No mining or staking required
• Tokens via trust lines
• Examples: $KAG, $KAU, SOLO, ELS
• Issuer-backed assets
• Stablecoins and tokenized RWAs
• No smart contract needed
• Instant transferability
• User consent to hold assets
• Defines issuer relationship
• Prevents unwanted tokens
• Reserve requirement (2 XRP)
• Enables decentralized issuance
• Gateway accountability
• Protocol-level NFT standard
• No smart contract required
• Built-in royalty support
• Low minting cost
• Instant trading on DEX
• Examples: SOLO NFTs, ELS art
XRPL Consensus Model
how XRPL reaches agreement
– NOT Proof of Work (no mining)
– NOT Proof of Stake (no staking rewards)
– Validators agree through Unique Node List (UNL)
– 80%+ agreement required for consensus
– Transactions finalize in 3-5 seconds
– Energy efficient (minimal computational work)
– Anyone can run a validator node
• Instant finality (no confirmations)
• Extremely low energy usage
• No centralized mining pools
• Predictable transaction costs
• High throughput (1,500+ TPS)
• No front-running possible
• UNL creates trust assumptions
• Fewer validators than PoS chains
• Less “trustless” than Bitcoin
• Governance through foundation
• Limited smart contract capability
• Different security model
Native DEX & AMM
built-in exchange functionality
• Built into XRPL protocol
• Limit and market orders
• Any token pair tradeable
• No smart contract risk
• Cross-currency payments
• Path-finding optimization
• Liquidity pools on XRPL
• Constant product formula
• LP token rewards
• Continuous auction mechanism
• Reduces MEV/front-running
• Complements order book
XRPL Ecosystem Use Cases
what’s being built on XRPL
• $KAG/$KAU — redeemable silver/gold
• Tokenized real estate
• Commodity-backed tokens
• Carbon credits
• Precious metals
• Physical redemption enabled
• XLS-20 native NFTs
• ELS (Elysian) — art-focused
• SOLO — Sologenic platform
• Music NFTs
• Gaming assets
• Low-cost minting
• $RLUSD — Ripple’s stablecoin
• Fiat-pegged issued assets
• Private XRPL forks for CBDCs
• Palau, Bhutan pilots
• Cross-border settlement
• Regulatory-friendly design
• SOLO — tokenized stocks
• Lending protocols
• Yield opportunities
• Cross-chain bridges
• Payment rails
• Institutional infrastructure
XRPL System Overview Checklist
understanding the XRP Ledger
☐ Know XRPL = payment-focused chain
☐ Understand UNL consensus
☐ Know IOU/trust line system
☐ Understand native DEX function
☐ Know XLS standards (XLS-20)
☐ Understand transaction finality
☐ Know issued asset examples
☐ Understand cross-border focus
☐ Know major projects (SOLO, ELS)
☐ Understand CBDC potential
☐ Track Hooks development
☐ Follow ecosystem growth
☐ Compare to Ethereum model
☐ Understand trade-offs
☐ Know speed/cost advantages
☐ Recognize smart contract limits
☐ Evaluate for use case fit
☐ Consider security model