Ripple Was ‘a Buyer of XRP in the Secondary Market’ and ‘Expects’ to Keep Buying as ODL Adoption Grows

Ripple’s $XRP-powered On-Demand Liquidity (ODL) solution has seen its volume grow 8x year-over-year in the first quarter of 2022, with RippleNet seeing $15 billion in annualized payment volumes during the quarter.

According to Ripple’s Q1 2022 XRP Markets Report, the volume of its XPR-powered solution saw market “unprecedented growth” as its customers used ODL “for several different use cases beyond traditional remittances or individual payments, including treasury and bulk SME payments.”

On-Demand Liquidity, it’s worth noting, is a tool Ripple created that is part of its RippleNet offering, and that uses XRP to source liquidity during cross-border transactions. Through it, the need to pre-fund accounts is eliminated. Ripple’s website includes several banking giants as RippleNet users, including Santander, Bank of America, SBI remit, and Banco Rendimento.

Ripple’s report details that last quarter its total XRP sales, net of purchases, were $273.27 million, down from $717.07 million in the previous quarter. It adds the firm has “continued to engage in sales related to ODL and these volumes have ramped up substantially as Ripple’s ODL business expanded as well.”

It adds:

Ripple has been a buyer of XRP in the secondary market and expects to continue to undertake purchases at future market prices as ODL continues to gain global momentum. 

The report details that Ripple’s total sales, net of purchases, ended the quarter representing 0.29% of the global XRP volume, according to CryptoCompare’s TopTier volumes. The firm also noted that some wallets being used to sell XRP also provide short-term leases to market makers, and that these leases are often seen by market participants as sales.

These leases, Ripple adds, are ultimately returned to the company. The total amount of leases outstanding in the first quarter was 95.3 million XRP.

During the first quarter, a total of three billion XRP were released out of escrow, meaning one billion left escrow per month in line with the prior quarter. Ripple says 2.4 billion of those XRP were returned and subsequently put into new escrow contracts throughout the quarter.

Ripple also detailed that throughout the quarter there were a total of 140,8 million transactions on the XRP Ledger as the community kept on creating and advancing “more projects and apps to address a variety of use cases.”

Ripple Updates on XLS-20 Standard

The report details Ripple’s new standard,  called XLS-20, meant to “help developers build more advanced and innovative NFT applications” on top of the XRP Ledger, hasn’t yet been released as NFT functionality is expected to “bring considerable additional transaction volume to the XRP Ledger,” and as such additional performance testing is necessary.

The firm added that enabling a native NFT object on the Ledger “requires 80% of validators to vote in favor of XLS-20.” Ripple itself is one contributor to the network and operates 4 of the 144 known validators, meaning it represents less than 3% of the total.

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