Ripple (XRP)

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Field

Content

General information

S.1

CASP Name

BB TRADE ESTONIA OÜ

S.2

Relevant legal entity identifier

984500L05A5D0E66Q610

S.3

Blockchain network name

Ripple

S.4

Name of the crypto-asset

XRP

S.5

Consensus Mechanism

XRP Ledger Consensus Protocol

S.6

Incentive Mechanisms and Applicable Fees

The XRP Ledger (XRPL) utilizes a unique consensus mechanism known as the XRP Ledger Consensus Protocol. This system involves validators (trusted nodes) that agree on the order and outcome of transactions. It operates on a principle of a supermajority of validators agreeing to confirm transactions, eliminating the need for energy-intensive mining or staking.

Incentives: Validators on the XRPL do not receive direct financial rewards in XRP for validating transactions. They are typically run by institutions, businesses, and individuals who benefit from the network's stability, speed, and low cost, or who have an interest in its decentralization and security. The incentive is primarily in supporting the ecosystem, ensuring their own transactions are processed, and maintaining the integrity of the ledger. 

Fees: Transaction fees on the XRP Ledger are designed to be extremely low and are burned (destroyed) rather than paid to validators. This mechanism acts as a spam prevention measure, making it economically unfeasible to flood the network with junk transactions.

The current minimum standard transaction cost is 0.00001 XRP (10 drops). 

Fees can increase dynamically with network load to prevent denial-of-service attacks. 

This design enables the XRPL to be highly efficient, fast (3-5 second transaction finality), and scalable (up to 1,500 transactions per second or more), making it suitable for high-volume financial applications like cross-border payments.

S.7

Beginning of the period to which the disclosure relates

2024-01-01

S.8

End of the period to which the disclosure relates

2024-12-31

Mandatory key indicator on energy consumption

S.9

Energy consumption

~245,000 kWh per calendar year

S.10

Energy consumption sources and methodologies

The energy consumption of the XRP Ledger primarily comes from the electricity used by the independent servers (validators) that participate in its consensus process. Unlike Proof of Work, there is no competitive mining. Methodologies for estimating this energy typically involve:

Hardware analysis: Measuring the typical power consumption of standard server hardware used by XRPL validators.

Node count scaling: Multiplying the estimated hardware consumption by the number of active and publicly known validators on the network.

The XRP Ledger is widely cited as being one of the most energy-efficient blockchains due to its consensus mechanism. Ripple (the company) has also committed to achieving net-zero carbon emissions by 2030 for its own operations.

Supplementary key indicators on energy and GHG emissions

S.11

Renewable energy consumption

~36%

S.12

Energy intensity 

~0.0079 kWh per transaction

S.13

Scope 1 DLT GHG emissions – Controlled

0 t CO2eq per calendar year

S.14

Scope 2 DLT GHG emissions – Purchased

~116.37 t CO2eq per calendar year

S.15

GHG intensity 

~0.00015 kg CO2eq per transaction

S.16

Key energy sources and methodologies

The energy sources for the XRP Ledger's validators are diverse, reflecting the global distribution of these nodes. They draw electricity from the local grids in their respective geographical locations, which consist of a mix of conventional energy sources (e.g., natural gas, coal) and renewable energy sources (e.g., hydro, solar, wind, nuclear). Methodologies for assessing this involve:

Geographic distribution: Identifying the locations of critical validators on the network.

Grid mix analysis: Correlating these locations with public datasets on electricity generation mixes and carbon intensity factors for those regions.

Due to the inherent efficiency of the RPCA consensus, the total energy demand is minimal, regardless of the energy mix.

S.17

Key GHG sources and methodologies

The primary source of Greenhouse Gas (GHG) emissions for the XRP Ledger is Scope 2 (indirect emissions from purchased electricity). Methodologies for estimating these emissions typically involve:

Energy consumption * Emission Factor: Multiplying the estimated total electricity consumption of the XRPL (S.8) by the carbon intensity (grams of CO2 equivalent per kWh) of the electricity mix used by the validators. 

Focus on network operations: Calculations primarily focus on the operational energy usage of the validator nodes, which is the main energy-consuming component of the ledger. Ripple (the company) also actively supports carbon removal projects and aims for net-zero emissions for its own corporate footprint.