XRP Ledger Lowers Reserve Requirements To Boost Adoption

According to Cointelegraph, the XRP Ledger has significantly reduced its base reserve requirements, lowering them from 10 XRP ($25.60) to just 1 XRP ($2.56) as of December 2. This change is expected to facilitate easier entry 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 keep in reserve. The adjustment in reserve requirements was implemented at 10:45 pm UTC and was announced by the pseudonymous XRP validator operator Vet. Alongside the base reserve reduction, the owner reserve has also been decreased from 2 XRP ($5.12) to 0.2 XRP ($0.51). This means 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 deter the creation of spam accounts with minimal XRP holdings. However, some developers have criticized the high reserve requirement, arguing that it has hindered the network's adoption. 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, enabling them to vote for the change. WietseWind acknowledged potential drawbacks, such as increased ledger activity that could challenge infrastructure capacity. However, he viewed this as a positive issue, indicating higher user engagement and activity. He expressed confidence that engineers could manage the additional network stress and develop solutions to accommodate it. Although the change was implemented on XRPL Labs nodes in October, it required a validator reset and a vote from all validators, which was completed by December 2. This development coincides with a period of rapid growth for XRP, the native coin of the XRP Ledger. Prior to Donald Trump's election as U.S. President, XRP was valued at less than a penny per coin. Since then, it has surged 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 U.S. Securities and Exchange Commission (SEC). The SEC contends that XRP is a security and should have been registered accordingly, while Ripple disputes this classification. Ripple has been fined $125 million in the lawsuit but has appealed the decision.