Original source: Justin Bons X account
Author: Justin Bons, Founder of Cyber Capital
Compiled by: Luffy, Foresight News
Ripple (XRP) is a centralized and permissioned network, contrary to the claims of its executives. XRP misleads investors by falsely reporting its decentralized nature; in reality, the network is entirely controlled by the foundation.
XRP consensus is based on UNL (Unique Node List), where trusted nodes are determined by centralized entities, including the foundation. XRP consensus is not based on PoS or PoW, but on PoA (Proof of Authority), yet they claim to be more decentralized than Bitcoin and Ethereum...
All of this is theoretically supported by Ripple's own documentation; it is hard to find any researchers outside of XRP calling this design 'decentralized,' yet they are deceiving the public.
However, users can modify their own UNL and choose whom to trust. The language here is subtle. Truly decentralized cryptocurrencies are 'trustless' because no 'trust' is required; choosing whom to trust is entirely different from being trustless!
XRP is not trustless at all; worse yet: if your UNL overlaps insufficiently with the rest of the network, you will face risks. According to Ripple's documentation: 90% UNL overlap is required to prevent forking.
This means that in practice, you need to obtain direct permission from the XRP Foundation to participate in consensus, which is nearly centralized in terms of blockchain design... Now, let’s delve deeper into these UNLs.
We have established that UNL is the trusted third party ultimately chosen by the XRP Foundation, and as we delve deeper into these UNLs, this is further confirmed: for a long time, there was only one UNL, namely the dUNL managed by the XRP Foundation.
However, this list is not static but dynamic. The XRP Foundation can change the validator list in a completely centralized manner without any notice, kicking out anyone who violates its authority.
As time has passed, there are now two UNLs, namely dUNL and XRPLF, both directly funded by the XRP Foundation. This adds another layer of de facto control over the network; let me explain:
Blockchain allows each participant, who do not trust one another, to coordinate thanks to the underlying incentive mechanisms (PoS or PoW). However, XRP lacks block rewards and incentives; it is purely based on trust. So how do different UNLs coordinate with each other?
The claims of XRP are based on the notion that different parties can spontaneously organize around a new UNL list without the incentive mechanisms mentioned earlier. Clearly, this is nonsense, as this is precisely the problem that blockchain aims to solve; the new UNLs cannot achieve coordination.
If the new UNL cannot coordinate, it means the foundation has effective complete control, and control over validators is equivalent to control over the network, which resembles a consortium chain.
In all other blockchains, you cannot choose validators because they are trustless and permissionless, which is why validators can be anonymous, as it is secured by cryptoeconomic game theory rather than trust; this is fundamentally different for XRP.
XRP is not a cryptocurrency at all. Since it is neither PoS nor PoW, it is a PoA; otherwise, what else could it be? Consensus algorithms require a verification mechanism, and trust is the foundation of this system; thus: XRP is a PoA!
PoA systems always have a central authority to appoint validators. So, how does the existence of two 'official' UNL lists currently contradict my assertion that different UNLs cannot coordinate? This is where things start to get truly crazy:
Upon careful examination, I found that all UNLs are actually identical, using the same set of validators, further proving that the foundation effectively controls the XRP network!
This screenshot is from two years ago, but I confirm that the situation remains the same, proving that the new UNLs cannot coordinate with each other. Thus, the foundation’s list becomes the de facto list, as all UNLs must comply, or there is a risk of being forked.
This also allows the foundation to conduct censorship when compelled, as they have such a high degree of control. This is fundamentally different from how cryptocurrencies operate and explains why only 20% of validators can stop the network...
Running trusted validators also comes with no rewards. Unlike PoW or PoS, where the cost of attacks reflects block rewards for miners/stakers. This is why decentralization metrics are highly correlated with block rewards. On XRP, this decentralization metric is zero.
I started researching XRP early on, and I clearly remember that people recognized the trade-offs of decentralization. As the community and leadership's claims became more extreme, this situation gradually changed. I say this not to belittle investors but to empower them.
Help break the XRP echo chamber and stop being the exit liquidity for others. The pre-mining rate of XRP is as high as 99.8%, making it one of the most unfair distributions in history, as no new XRP was created; all newly circulated XRP was purchased from the founders.
I have always been interested in the early discussions about Ripple's decentralization. Pretending that XRP is permissionless is not the right answer; the real solution lies in replacing the UNL list with PoS, transforming XRP into a more traditional decentralized blockchain.
They can also honestly admit that the facts are the facts, and I will not dispute that. However, attracting ignorant retail investors with lies is wrong, and this is where we as an industry need to draw the line and self-regulate!
XRP may currently be able to bribe or deceive the SEC, but they cannot deceive us, the native inhabitants of cryptocurrency. No matter how complex and profound the rebuttals are, this will not change some simple facts: XRP is now completely permissioned and centralized.
If you truly care about XRP, take it seriously. Because there are solutions in this critical post that can help XRP succeed: admit its centralization or shift towards decentralization. The truth sets us free; leaving XRP or applying pressure for change, nothing is irreversible.
