Is XRP losing its on-chain traction? Ripple’s Chief Technology Officer, David Schwartz, has addressed the surprising 30-40% decline in XRP Ledger (XRPL) transaction volume, attributing it to a strategic shift toward off-chain settlements. This revelation comes amid growing scrutiny over Ripple’s institutional adoption claims. Let’s break down what this means for XRP’s future.
Why Has XRP On-Chain Volume Dropped 30-40%?
Ripple’s Q1 2025 XRP Markets Report highlighted a significant reduction in on-chain activity, including:
- A 30-40% decline in XRPL transaction volume
- Reduced new wallet creation
- Slower adoption growth than expected
David Schwartz clarified that this trend stems from Ripple’s partnerships with over 300 financial institutions preferring off-chain settlements for regulatory compliance and efficiency.
Ripple CTO Defends Off-Chain Strategy
Schwartz emphasized key reasons for off-chain adoption:
| Factor | Explanation |
|---|---|
| Regulatory Compliance | Financial institutions avoid public blockchain scrutiny |
| Efficiency | Faster settlements without on-chain congestion |
| Terrorism Financing Risks | XRPL DEX lacks sufficient controls |
Is XRP Ledger DeFi Activity More Resilient?
While on-chain transactions dropped sharply, DeFi on XRPL saw only a 16% quarterly decline. However, with just $81.8 million in Total Value Locked (TVL), institutional activity remains largely invisible.
What’s Next for XRP and On-Chain Adoption?
Schwartz hinted at a potential shift as institutions recognize blockchain benefits. Ripple plans to discontinue its XRP Markets Report but promises more transparency as adoption evolves.
FAQs
1. Why did XRP on-chain volume drop?
Ripple’s financial partners increasingly use off-chain settlements for compliance and speed.
2. Does this mean XRP adoption is declining?
Not necessarily—usage may be shifting rather than decreasing, but transparency is reduced.
3. What is the future of XRP Ledger?
Ripple expects more on-chain adoption as institutions warm to blockchain efficiencies.
4. How does this affect XRP investors?
Investors should watch for verifiable adoption metrics as off-chain activity is harder to track.
