XRP’s 99% Drop: Understanding Ripple’s Blockchain Situation

The XRP Ledger (XRPL) has recently faced a dramatic decline, as on-chain data indicates a staggering 99% drop in activity on the Ripple blockchain. While this may seem alarming, it has not substantially affected the XRP price, suggesting that the situation might not be as severe as it appears.

Key Takeaways

The XRP Ledger saw a 99% drop in transaction activity over a weekend, primarily due to typical weekend trends in cryptocurrency trading.
On-chain data shows a significant decrease in payment volumes and transactions, but this is mostly attributed to reduced trading among institutional investors.
Despite the activity drop, XRP remains resilient, trading above $2, with no clear link to the recent decline in network usage.
Increased whale transactions were recorded shortly before the activity drop, indicating ongoing interest from large holders.
Updates and improvements to the XRP Ledger are on the horizon, aimed at enhancing functionality and security.

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Overview of Ripple’s XRP Ledger Activity Decline

Over the past weekend, the XRP Ledger experienced a sharp decrease in transaction activity, plummeting by about 99% within 48 hours. However, this decline appears more related to timing than to any significant technical issues within the ledger. It is common for cryptocurrency transaction volumes to dip on weekends as many institutional traders and market makers either scale back their trading efforts or halt them altogether, resulting in thinner liquidity and reduced payment volumes.

Data from XRPScans highlighted that the payment volume between accounts on the XRPL dropped from over 1.09 billion on Thursday, January 8, to just 166.99 million by Saturday. This dramatic reduction illustrates how much network activity can falter over a weekend. Furthermore, as of January 11, the payment volume further decreased to approximately 137.40 million.

Additionally, the number of executed transactions on the XRP Ledger saw a decline during this period. According to XRPScans, the transaction count fell from over 2 million on Thursday to 1.8 million on Saturday. This drop in both transaction volume and number highlights that even slight decreases in participation from significant accounts or institutional traders can considerably impact network metrics.

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Source: Chart from XRPScan

Despite this downturn, XRP's price remains stable above $2 and appears to be largely unaffected by the recent slump in network activity. Although CoinMarketCap reports indicate a more than 4% decline in value over the past week, there is no direct correlation between this price fluctuation and the recent 99% drop in ledger activity.

Interestingly, just before this downturn, the XRP Ledger noted a significant rise in whale transactions, with each transaction exceeding $100,000. This trend suggests that, despite short-term fluctuations in network activity, the XRP ecosystem is still seeing substantial engagement from its large holders.

Update on XRP Ledger Developments

Vet, a validator and developer for the XRPL dUNL, has provided an update regarding the XRP Ledger, indicating that a significant batch of features and fixes is approaching its activation phase. This development is crucial for the blockchain network, as it aims to improve functionality and security for both developers and users.

Vet mentioned that the upcoming updates will introduce several key enhancements, including TokenEscrow, AMMClawback, Multi-Purpose Tokens (MPT), and Price Oracle. He reassured the community that the XRP development team is dedicated to ensuring peak performance for the ledger and is working diligently to implement these features efficiently, irrespective of XRP's current market price.

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XRP trading at $2.04 on the 1D chart | Source: XRPUSDT on Tradingview.com