XRP Ledger Fee Model Defended Amid Token Burn Debate
The XRP Ledger has destroyed 14,403,762 XRP tokens since its launch, which amounts to just 0.014% of its total fixed supply of 100 billion. The network's base transaction fees remain a fraction of a cent per transaction.
David Schwartz, Ripple's CTO Emeritus, defended the current fee model against proposals to increase transaction costs to speed up the token burn rate. He argued that fee revenue is not a useful metric, as it measures the friction the network failed to eliminate. 'I think fee revenue is a terrible metric since it measures how much friction the chain *didn't* remove,' he tweeted.
A user on X suggested that validators could raise the base fee tenfold or hundredfold to accelerate the burn rate while keeping costs below one cent. Schwartz rejected the idea, stating that high fee revenue primarily benefits those collecting the fees, not the end users who pay them.
The debate highlights differing views on whether Layer 1 networks should prioritize token burns or maintain low-cost transfers for scalability. The XRP Ledger's design focuses on cross-border payments and institutional settlement, with any fee changes requiring an 80% validator consensus.