David Schwartz, Ripple‘s CTO Emeritus and a key architect behind the XRP Ledger, recently addressed public questions regarding the network’s persistently low transaction fees during a conversation on X.
Debate over XRP Ledger’s low transaction fees
The discussion began after an X user pointed out that some investors and analysts now value Layer 1 blockchains based on their fee revenue. By this measure, the XRP Ledger trails its peers, since its base transaction fee remains just a fraction of a cent.
The user emphasized that unlike many competing L1 networks, XRP Ledger’s fees are not distributed to validators as income. Instead, fees are permanently burned, effectively reducing the overall supply of XRP. This mechanism applies deflationary pressure to the token’s fixed supply of 100 billion units.
Data from XRPscan show that since the XRP Ledger went live, approximately 14,403,762 XRP—equal to about 0.014% of the entire supply—have been burned, a consequence of the network’s consistently low fees.
The user suggested that the network could consider incrementally raising transaction fees, proposing validators could vote for a base fee increase by a factor of 10 or 100. Even with a substantial hike, transaction costs would likely remain affordable—well under a US cent per operation—while the burn rate would increase considerably.
The user questioned whether near-zero fees play a pivotal role in supporting payments and tokenization on the network, or if pursuing higher fee revenue should be considered given market trends.
Mini dictionary: XRPscan, a third-party analytics platform providing real-time monitoring and data on transactions, accounts, and fee statistics for the XRP Ledger.
Schwartz’s perspective on metrics and network adoption
Responding to these questions, Schwartz argued against using fee revenue as a primary metric for evaluating blockchain projects. He maintained that the true value of a network like XRP Ledger lies in minimizing frictions for users rather than maximizing profits for validators or block producers.
“I think fee revenue is a terrible metric since it measures how much friction the chain ‘didn’t’ remove,” Schwartz said.
Highlighting the network’s foundational ethos, Schwartz contended that affordable, rapid settlement is a core objective. He cautioned that focusing on fee revenue risks prioritizing network revenue over user benefit.
“If you represent the people who collect the fees, then fees are great. But what about the people who ‘pay’ the fees? Who cares about their interests?” he continued.
Schwartz’s defense positions near-zero transaction fees as critical for supporting mass adoption, especially in payments and asset tokenization. He suggested that low costs could drive institutional interest and pave the way for broader use cases on the network.
Ripple, a US-based financial technology company, is known for its role in developing both the XRP ledger and cross-border payment solutions for banks and payment service providers.
