XRP Ledger developers have lowered the base reserve for accounts by 90% from 10 XRP ($26.80) to 1 XRP ($2.68) amid the recent surge in the price of the cryptocurrency.
According to onchain data, the change was implemented at 10:45 p.m. UTC on Monday, validated in ledger 92508417. The base reserve requirement represents the minimum amount of XRP that must be held in an XRP Ledger account to keep it active. The adjustment was made via a fee voting process where validators on the network collectively agreed on changes to the reserve settings. It aims to make the network more accessible by lowering the cost of creating and maintaining accounts, encouraging increased activity.
The XRP Ledger's reserve requirements were last reduced from 20 XRP to 10 XRP in September 2021 during the prior crypto bull market when the price of XRP was around $1. The reserve increment fee was also reduced by 90% from 2 XRP to 0.2 XRP on Monday, meaning that for each additional item an account owns, such as trust lines (connections to non-XRP assets like USDC), offers (buy/sell orders on the native DEX) or escrows, an extra 0.2 XRP is required to discourage excessive resource consumption.
“XRP Ledger reserves just dropped,” XRPL validator “Vet” confirmed. “Activating an XRP account now costs 1 XRP. Holding a Token Trustline only 0.2 XRP. Excessive XRP is now freed up in your account that you can spend now.”
Among other validators supportive of the change, ahead of the implementation, XRPL Labs said that while increased activity on the ledger could be challenging, it was a “good problem to have” and infrastructure providers were already "stepping up their game” anyway.
The timing of the reduction coincides with a significant increase in XRP's price, which has surged over 448% during the past month, according to The Block’s XRP Price Page, currently trading for around $2.68.
XRP/USD price chart. Image: The Block/TradingView.
XRP, closely associated with digital asset infrastructure firm Ripple, subsequently surpassed Tether's USDT and Solana's SOL in the last few days to become the world's third-largest cryptocurrency, with a market cap of $153.7 billion.
Only bitcoin and ether rank higher, with market caps of $1.9 trillion and $432.9 billion, respectively, while USDT and SOL currently sit at $134.7 billion and $106.5 billion.
"XRP's recent strength seems to be driven by the news last week that NYDFS is close to approving Ripple's proposed stablecoin RLUSD," Presto analyst Peter Chung recently told The Block.
XRP's momentum is also linked to SEC Chair Gary Gensler's announcement of plans to step down in January, which could ease Ripple's legal battles under more crypto-friendly leadership.
"Gensler stepping down is also a plus as this means that the SEC under a new leadership is likely to settle or withdraw many of the SEC's outstanding lawsuits, including the appeal against Ripple," Chung said. "It's difficult to judge how long the rally will last. If the XRP community can leverage the RLUSD to nurture the ecosystem on XRP Ledger and create values, it could. Ripple will certainly be in a better position to do so without the distraction from the SEC lawsuit."
Market participants are also watching for spot XRP ETF approvals in the U.S., with several asset managers, including 21Shares, Bitwise and WisdomTree, having already filed for such funds.
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