$XRP **1. Core Technology and Purpose**

- **XRP Ledger (XRPL)**: A decentralized, peer-to-peer ledger designed for fast, low-cost cross-border payments. It settles transactions in 4-5 seconds and handles up to 1,500 transactions per second. Unlike Bitcoin, it uses a **consensus algorithm** (not proof-of-work) with a trusted validator network (Unique Node Lists, or UNLs) to prevent double-spending.

- **Fixed Supply**: 100 billion XRP were created at inception, with a deflationary mechanism: small amounts are destroyed as transaction fees. XRP is divisible into 6 decimal places (1 drop = 0.000001 XRP).

- **Anti-Spam Measures**: Transaction costs (destroyed XRP) scale with network load. The base fee is 0.00001 XRP (10 drops) but increases during congestion to deter spam .

### **2. Key Features and Use Cases**

- **Cross-Border Payments**: XRP’s primary use case is facilitating institutional cross-border transfers, offering cost and speed advantages over traditional systems like SWIFT.

- **Decentralized Exchange (DEX)**: The XRPL includes a built-in DEX for trading issued currencies (e.g., stablecoins) and XRP. However, current DEX volumes are extremely low ($57k/day), attributed to a lack of DeFi features like leverage and advanced order types .

- **Smart Contract-Like Tools**: Supports escrows, payment channels, and checks but lacks programmability like Ethereum. Features like **Deposit Authorization** help institutions comply with regulations by restricting incoming payments to approved senders.

### **3. Transaction Mechanics**

- **Cost Structure**: Transactions destroy XRP, with fees varying by type:

- Standard: 10 drops.

- Multi-signed: 10 drops × (1 + signatures).

- EscrowFinish: Higher fees based on preimage size.

- **Reserve Requirements**:

- **Base Reserve**: 20 XRP per account (non-transferable).

- **Owner Reserve**: 5 XRP per ledger object (e.g., trust lines).