Justin Bons, the founder and chief investment officer of Dutch blockchain fund Cyber Capital, has sharply criticized $XRP and its governance model, raising questions about the cryptocurrency’s decentralization and the transparency of its validator software.
XRP validator software under scrutiny
Bons alleged that $XRP has been running on closed-source validator code for the past two weeks. He claimed that this code would soon become mandatory for all validators, meaning those who do not adopt it could be excluded from participating in the network.
He attributed this situation to a permissioned node list, maintained by entities responsible for the $XRP network. Validators, he argued, must comply with the software and requirements dictated by those who control these lists.
Bons asserted that the use of closed-source binaries could expose validators and the network to significant risks, suggesting that malicious code has the potential to steal funds or disrupt the system. He maintained that “selling $XRP to retail as ‘decentralized’ is straight-up fraud,” and described the mandatory implementation of closed-source code as a clear threat to the principles of open networks.
Bons also dismissed the justification that closed-source code might be necessary for critical security updates. He compared $XRP’s approach to that of Bitcoin, Ethereum, and Solana, stating that other major networks have historically implemented fixes and upgrades by inviting validators to run new, open-source code—even when security vulnerability details have not been widely disclosed.
He argued that this ongoing transparency allows validators to inspect the underlying code for themselves, achieving a balance between user security and decentralized integrity.
Criticism of Ripple’s consensus structure
Bons directed further criticism at the consensus system underlying the $XRP network. He labeled it as operating on a Proof of Authority (PoA) basis—a consensus mechanism where authority is established by designated entities. Ripple, a US-based enterprise blockchain company, and the XRP Ledger Foundation reportedly maintain the two critical permissioned validator lists governing network participation.
Bons argued that this system means XRP is reliant on permissioned entities rather than an open, permissionless network. He drew a comparison to Canton’s blockchain network, noting that while both platforms control validators through permissions, Canton is more transparent about its governance model.
Mini dictionary: Proof of Authority (PoA) is a blockchain consensus mechanism where a set of approved accounts, rather than anonymous or permissionless participants, are responsible for validating transactions and creating blocks. Authority is usually granted to entities selected by a central organization, often leading to greater speed and efficiency but with decreased decentralization compared to Proof of Work or Proof of Stake models.
Allegations of misrepresentation and centralization
The Cyber Capital founder took issue with what he described as Ripple’s portrayal of $XRP as a decentralized network. He contended that externally, crypto researchers do not recognize $XRP as decentralized, viewing it as one of the most centralized blockchain projects.
He emphasized that “crypto researchers outside the $XRP ecosystem generally consider the token’s decentralization narrative a ‘bad joke’,” arguing that convincing retail investors otherwise misleads the market in a way akin to investment fraud.
Bons pointed to the token’s supply distribution as further evidence of his claims. He said Ripple originally allocated the entire $XRP supply to itself and has gradually sold tokens to the public—a process raising further concerns over centralization and the potential for manipulation.
Calls for greater decentralization
Summing up his position, Bons warned that concentrated authority within blockchains, such as he sees in $XRP’s design, could be exploited. He encouraged users to migrate to alternative blockchains that prioritize genuine decentralization, scalability, and sound governance.
