What to Know:
- Ripple CTO proposes a two-tier staking system for the XRP Ledger (XRPL).
- The design aims to introduce staking rewards while avoiding centralization concerns.
- XRP faces market pressure despite the launch of spot XRP ETFs.
David Schwartz, Ripple’s CTO, has proposed a novel two-tier staking system for the XRP Ledger. This approach aims to introduce staking rewards without giving Ripple an outsized influence on the network. The proposal addresses concerns about centralization and governance within the XRPL.
The first tier involves individual validators policing staked funds, with slashing as a last resort. This approach could lead to validators only accepting stakes from known entities, potentially creating centralization risks. To counter this, Schwartz suggests a second layer based on a new, “worthless” governance token.
Holders of this governance token would manage the validator list, replacing the current Unique Node List (UNL) with a self-governing system. Participants could “fork by governance” if holders misbehave or collude, creating a new token and directing their servers to it. Schwartz likens this to nuclear deterrence, which is effective because the consequences of using it are too severe.
Despite the ongoing technical discussions, XRP has experienced market pressure recently. Data shows the token trading down roughly 10% over the past week. Recent data also revealed that only 58.5% of the XRP supply is currently in profit, the lowest level in a year.
This market fragility persists despite a significant milestone: the launch of spot XRP ETFs. While Canary Capital’s XRPC fund has begun trading, products from other firms are expected to follow. The market’s reaction to these developments will be critical in determining XRP’s trajectory in the coming months.
The proposed two-tier staking system represents a significant step towards enhancing the XRP Ledger’s functionality and governance. While the market faces short-term challenges, the launch of spot XRP ETFs signals growing institutional interest. Continuous innovation and regulatory clarity will likely shape the future of XRP and the broader cryptocurrency market.
Source: Original article
