According to Cointelegraph, the XRP Ledger has significantly reduced its base reserve requirements, dropping them from 10 XRP ($25.60) to just 1 XRP ($2.56) on Dec. 2. This change is expected to facilitate easier onboarding for new users by allowing them to fund their wallets with a smaller amount of cryptocurrency, potentially removing a barrier to adoption. Additionally, existing users can now utilize some of the XRP they previously had to hold in reserve.
The adjustment to the reserve requirements was implemented at 22:45 UTC and was announced by pseudonymous XRP validator operator Vet. Along with the reduction in the base reserve, the owner reserve was also reduced from 2 XRP ($5.12) to 0.2 XRP ($0.51). This means that users are now required to hold only 0.2 XRP per object in their accounts, which can include non-fungible tokens (NFTs), trust lines, signer lists, or owner directories. The reserve system was initially designed to prevent the ledger from growing beyond the storage capacity of nodes and to prevent the creation of spam accounts with minimal XRP holdings. However, some developers criticized the high reserve requirement, arguing that it hindered the adoption of the network.
On October 16, XRP Ledger developer WietseWind announced that all nodes managed by the XRPL Labs development team had been configured to process the lower reserve requirement, allowing them to vote on the change. WietseWind acknowledged potential downsides, such as increased ledger activity that could challenge infrastructure capacity. However, he viewed this as a positive issue, indicating increased user engagement and activity. He expressed confidence that engineers could manage the additional stress on the network and develop solutions to accommodate it. While the change was implemented on XRPL Labs nodes in October, it required a validator reset and a vote by all validators, which was completed on December 2.
This development coincides with a period of rapid growth for XRP, the native currency of the XRP Ledger. Prior to Donald Trump’s election as US president, XRP was valued at less than a cent per coin. It has since risen to $2.65, marking its highest level since February 2018. Meanwhile, Ripple Labs, the founding development team behind XRP, continues its legal battle with the US Securities and Exchange Commission (SEC). The SEC claims that XRP is a security and should have been registered as such, while Ripple disputes this classification. Ripple was fined $125 million in the lawsuit, but has appealed the decision.
