Original title: Everything You Don't Want to Know about XRP Ledger: Wallets, Memecoins and More.
Original author: Ignas | DeFi Research
Original source: https://www.ignasdefi.com/
Compiled by: Daisy, Mars Finance
I can hardly believe I'm writing this blog.
A year ago, I wrote that the bull market would be crazier than you expect. And seeing XRP rise 3.5 times in a month, surpassing Solana, felt like reaching a peak of madness.
You might hate XRP and want to ignore it. I myself ignored it for years—since joining crypto in 2018. But here's the thing: the market is not wrong; we are.
If meme coins become too big to ignore, perhaps XRP will be the next playground for 'degens' pursuing intergenerational wealth. Or maybe not.
In any case, out of curiosity, I decided to learn more.
This blog will break down how the XRP Ledger (XRPL) works, how to purchase tokens on it, the core concepts you need to understand, and resources for deeper exploration.
After reading this, you'll at least understand XRP and thus decide whether it's worth engaging with—or staying away from it.
What is XRPL?
XRPL claims to be a blockchain built for speed and efficiency.
But it’s actually not particularly fast, decentralized, or efficient (as you can see, efficiency is a point of contention).
XRPL does not use PoW or PoS consensus mechanisms. It employs a federated consensus mechanism, where validators reach agreement on transactions without the need for mining or staking.
Here’s how it works:
More than 109 validators process transactions, with 31 trusted validators forming the unique node list (UNL) to reach consensus.
Source: xrpscan
In practice, about 31 trusted UNLs run the XRP Ledger. These include Arrington XRP Capital, Bifrost Wallet, Ripple itself, XRPscan, and others. You can find the real-time UNL list here or on XRPscan (which is more user-friendly).
They claim any entity can run and publish UNL, and these UNLs are selected based on reliability. However, relying on UNLs also brings centralization risks, as Ripple and the XRP Ledger Foundation have significant influence over the default UNL. There are claims that Ripple Labs needs to approve these UNLs.
The term 'federated consensus' is quite fitting.
You might expect XRP to be fast since it relies on only a few validators.
But it’s not like that. Transaction confirmations take 3 to 5 seconds. Solana is far ahead in terms of node count, transaction speed, and the smart contract capabilities you'll see.
The good thing is that transaction fees are nearly zero, with each transaction costing only 0.00001 XRP.
What are trustlines, reserves, negative balances, and Rippling
When you create an XRPL wallet (for trading XRP meme coins), you'll notice some unusual aspects.
First, you need at least 10 XRP to activate an account. Additionally, XRPL requires that every token you hold in your wallet has a reserve of 2 XRP (so if you hold 20 meme coins, you need to 'reserve' 40 XRP).
A governance vote is currently underway to reduce these requirements by tenfold. You can find the current requirements under the 'Base Reserve' and 'Owner Reserve' tabs on XRP Scan.
This is because balances work through 'trustlines' using different mechanisms. This is the most complex part; please give me a moment to explain.
'Trustlines are the structure used in the XRP Ledger to hold alternative tokens. Trustlines enforce the rules of the XRP Ledger, which state that you cannot force someone to hold tokens they do not want. This precaution is necessary to enable the application of the XRP Ledger in areas like community credit.' — From Ripple's documentation.
Essentially, through trustlines, no one will be forced to hold tokens they do not trust, avoiding spam, and allowing for freeze, authorization, and 'no Ripple flag' controls to prevent unnecessary balance adjustments.
Trustlines on XRPL are the foundation of its token system.
They connect two accounts and define the balance between them, enabling the issuance and transfer of tokens.
When an issuer creates a token, their balance may turn negative, indicating the amount they have issued, while the holder's balance becomes positive.
For example, if the issuer sends 100 tokens, their trustline balance is -100, and the receiver's balance is +100.
Rippling (the origin of the name Ripple) takes this process further by allowing token balances to flow between connected accounts during payments. It’s like a passive exchange system that allows funds to settle atomically without issuer involvement.
For example, if Alice owes Bob $10, and Bob owes Charlie $10, Rippling allows Alice to pay Charlie directly, adjusting the balances through trustlines.
Remember why Ripple designed it this way!
It’s like a 'double-entry bookkeeping system' for 'efficient' net settlement, designed to serve real-world assets, stablecoins, tokenized commodities, and cross-border payments.
This means issuers have more control over the use of assets.
To comply (think of stablecoins), authorized trustline issuers can enable the 'Require Auth' flag, restricting token ownership to approved accounts only. This feature makes XRPL suitable for KYC/AML (anti-money laundering) regulated assets.
Decentralized geeks might be quick to criticize this.
If you understand how it works, you might not want to enable Rippling, as your balance may be adjusted. Users can enable or disable the Rippling feature.
Enable Rippling:
If you want to allow balances to flow through your account as part of a payment path.
This is usually used by accounts acting as intermediaries, such as market makers or exchanges (not sure if they will earn fees, I guess not?).
Disable Rippling:
If you want to prevent your balance from being used in a payment path.
Typically used by regular users to protect their balances from accidental adjustments.
As mentioned, each trustline (for example, the trustline opened between your wallet and a meme coin issuer) requires locking 2 XRP in your wallet as a reserve.
If you feel confused, you can check Ripple's explanation.
EVM sidechain: Running Ethereum on XRPL
XRPL does not have a complete virtual machine like Ethereum's EVM, Solana's SVM, or Aptos's Move VM. Instead, it uses WebAssembly-based Hooks, which are lightweight programs for basic transaction logic.
Hooks are not as powerful as smart contracts. They are more suited for simple automation tasks, like rejecting transactions when balances are too low.
Nevertheless, XRPL does have a native AMM (automated market maker), allowing for liquidity provision and cross-token trading. We will cover how this works in detail later.
Therefore, while XRPL supports basic programmability, it cannot compete with Ethereum in the complex fields of DeFi or dApps—at least not on a native implementation level.
For this reason, Ripple is developing an EVM sidechain that is currently being tested, expected to launch in a few months. XRP will serve as the fuel token.
Alpha: EVM><XRPL bridging is supported by Axelar, so if it succeeds, Axelar could become a big winner here.
In short, XRP is becoming modular! It will be interesting to see if sidechains can gain enough attention.
Alright, the boring part is over, you made it through. Now comes the exciting part.
How to buy meme coins on XRP
A shocking fact is that Ripple Ledger has a native AMM (automated market maker), similar to an 'embedded AMM', where you can trade... mostly meme coins.
Although its TVL (Total Value Locked) is still quite low, trading volume has been rising due to the meme coin craze. Approximately 14 million XRP are locked in AMM pools, so we are indeed in the early stages (or you could say it's already late, as XRP's market cap exceeds Solana).
You can check the amount of XRP locked in each pool on XRP Scan.
Note that XRP Scan provides readable data about transactions, analytics, validators, and more. You can track whale wallets, token concentration data, making data-driven meme coin trading possible.
The easiest way to start trading meme coins:
1. Visit the First Ledger website. It allows you to create a wallet on Telegram or in a browser and keeps your keys stored locally. Also, try using the Xaman wallet on mobile. It runs well, and you can import your keys into both wallets to see which one you prefer.
2. Purchase XRP from a CEX (centralized exchange), or many recommend using Simpleswap to bridge different assets to XRP. I haven't tried it, but if you want to use it, I can share my referral link.
You can sort meme coins on Firstledger's token page. You'll see new tokens being created every minute.
Note! The supply of most meme coins is highly concentrated. You will see 10 wallets holding over 40% of the total supply. To make token issuance fairer, projects like Pump dot fun are indeed needed on XRPL.
Tip: Sort tokens by 24-hour trading volume, market cap, number of holders, or creation date. My intuition is that the earliest created tokens with the highest trading volumes and most holders will perform better than recently created tokens. However, the strategy is up to you.
A more advanced platform is xMagnetic.
You can discover tokens, provide liquidity, and view statistics. I recommend using the Xaman wallet in conjunction with xMagnetic. Sologenic DEX is another option, but it hasn't worked well for me.
Now you are ready to explore Ripple's 'degen' territory. The question is: are you willing to do so?
