The first quarter of 2024 saw a significant increase in activity on the XRP Ledger (XRPL), with on-chain transactions surging by 108%. The number of transactions rose from 121.03 million in the previous quarter to 251.39 million, indicating a growing engagement within the XRP ecosystem.
At the same time, the cost per transaction on the XRPL experienced a sharp decline of 45%, bringing the average transaction fee down to just $0.000856. This reduction in cost demonstrates the network’s efficiency improvements and the absence of congestion, as highlighted in Ripple’s latest quarterly XRP Markets Report.
Ripple played a major role in the crypto market during the first quarter of 2024. There was continued interest in BTC Spot ETFs in the U.S., with significant inflows and trading volumes. Notably, BlackRock’s iShares Bitcoin Trust alone attracted inflows of approximately $13.9 billion.
The quarter also witnessed a change in crypto market dynamics, with an increase in leverage use among traders. For example, ETF-authorized participants utilized leverage at the CME to hedge their inventories. Similarly, projects like Ethena managed significant funds, indicating a more sophisticated trading infrastructure to support these activities.
Centralized exchange volumes reached levels not seen since May 2021, with a total of $2.93 trillion recorded in spot volumes during March alone. This, combined with the surging volumes on decentralized exchanges, indicates a strong interest and activity in crypto trading.
The XRP’s trading volumes experienced a notable increase, with average daily volumes in Q1 reaching $865 million, a 40% increase from the previous quarter. This trend was also observed in the derivatives market, where the average daily open interest on XRP derivatives also rose.
Several technical upgrades within the crypto industry, such as Coinbase’s initiative to enable full on-chain operations for users and Ethereum’s Dencun upgrade, have significantly lowered the entry barriers, making it easier for cryptocurrencies to be adopted more widely.
Ripple is currently facing an ongoing lawsuit by the SEC over its institutional sales of XRP. The company is pushing back against the SEC’s demands for large financial penalties, arguing that there is no evidence of harm caused to investors and advocating for a much lower penalty, if any.
Globally, regulatory frameworks for cryptocurrencies continue to evolve. The EU’s Markets in Crypto-Asset Regulation (MiCA) is set to introduce strict compliance standards for stablecoin issuers, while Hong Kong is actively working on a crypto regulations bill.
The XRPL itself has undergone significant enhancements, particularly with the activation of the XLS-30 amendment, which introduced a non-custodial automated market maker (AMM) feature. This addition aims to strengthen on-chain liquidity and improve trading efficiencies on the XRPL’s decentralized exchange, according to Ripple.
Furthermore, integrations such as Axelar’s have expanded the XRPL’s capabilities, allowing it to support cross-chain functionalities and increase its utility in the DeFi industry. Educational initiatives, such as those from EasyA, are also playing a pivotal role in attracting more developers to the XRPL ecosystem, further enhancing the ledger’s functionality and outreach.
Overall, the increase in on-chain transactions and the decrease in transaction costs indicate a healthy and growing ecosystem for the XRP Ledger.
