XRP Ledger governance and growth challenges

David Schwartz, CTO Emeritus of Ripple and co-architect of the XRP Ledger, has addressed various governance and structural challenges facing the network. Initially, Schwartz rejected a proposal to increase transaction fees by 10 to 100 times. The proposal sought to accelerate the destruction of XRP by increasing the amount of tokens burned during transactions. Schwartz criticized the suggestion, calling the use of fee revenue as a performance metric “truly bizarre” and a “terrible metric,” noting that high fees represent friction rather than success. Schwartz later outlined broader growth obstacles, emphasizing that the ledger’s long-term health requires attracting independent participants to avoid being perceived as a tool serving only Ripple’s interests. He identified liquidity, capital on-ramps and off-ramps, and integration with existing financial systems as significant hurdles. He further clarified that the ledger is designed for specific financial tasks, such as real-world asset tokenization and payments, rather than general-purpose computing. To address governance, Schwartz highlighted plans for Evernorth to operate validators and participate in development to add network diversity. He also noted that while Ripple’s RLUSD stablecoin runs on the XRP Ledger, it must exist on other networks to achieve broader reach. Regarding tokenomics, Schwartz argued that the ledger’s low fees and performance attract financial activity, which drives value to the network. He stated that XRP is the only counterparty-free asset any account can accept and is required for transaction fees. While burning XRP prevents spam, Schwartz maintains that the token’s value is primarily driven by increased utility and demand from broader network use rather than the burning mechanism itself. Schwartz recently reiterated that the XRP Ledger is unlikely to achieve significant success in financial applications without a corresponding increase in demand and value for XRP.