What is Ripple's xRapid

Ripple perspective: the basics of XRP, XRapid and XPring

Ripple experienced 2019 with one laughing and one crying eye. While the XRP token had to cope with severe price losses, the network was able to mature through numerous new partnerships. In order to refresh the Ripple knowledge and maybe close one or the other gap, we give an overview of the basic terms.

XRP, Xrapid, Xpring, ODL: What initially reads like the work of an illiterate person hides specific functions in the Ripple network. In order to bring order to the cloudy alphabet soup, we explain below about the essential applications and specifications of this not undisputed ecosystem.


Ripple - XRP

Ripple or XRP refers to both the company and the network that uses the XRP token to create an ecosystem for international payment transactions. This is a distributed real-time protocol that can be used for many different types of payments and therefore likes to put the stamp "Internet of Value" on itself. Because the functions of the network are configured especially for banks and financial service providers, XRP is not without malice also referred to as the "Bitcoin of the banks".


Scalability

In direct comparison to Bitcoin, the digital asset XRP is particularly characterized by its scalability and speed of transfer. The infrastructure of the Ripple network allows the processing of 1,500 transactions per second. This means that the transaction capacity is significantly higher than that of many other blockchains. The fast processing of transactions is designed as a use case especially for banks and financial service providers. Hence Ripple's image as an enterprise project that offers applications for large customers such as banks and payment service providers.


Free exchange of values

Any forms of value can be transferred and various currencies can be exchanged via the Ripple network. For example, the protocol allows airline bonus miles to be exchanged for Bitcoin. Every participant can submit bids and offers in the network. Ripple then routes the inquiries and establishes the cheapest exchange. Trading among the participants is coordinated via a complex system of interconnected gateways that act as intermediaries between sender and recipient.

Xpring

The Xpring Initiative is a fund that supports various projects in the Ripple ecosystem and makes certain tools, services and programs available to developers. The background to the initiative is the promotion of innovative blockchain projects in order to expand a global infrastructure. Xpring particularly focuses on projects that build on XRP and the XRP Ledger. Ultimately, a network of developers and companies should grow that creates a creative breeding ground for future projects based on XRP ledgers.

On-Demand Liquidity - xRapid

On-Demand Liquidity (ODL) is a software solution that is tailored for banks and financial institutions. Formerly known as xRapid, ODL uses XRP as a bridge currency in transaction processes. ODL's technology processes global payment transactions quickly and with low fees.

The technology also solves another problem for banks. Transactions that find their way across the globe are usually expensive for the actors and take a considerable amount of time. Especially for payments in emerging markets and in countries with unstable local currencies, banks have to fall back on pre-financed liquidity accounts, which are associated with high fees.

At this interface, Ripple's XRP Token switches on as a bridge currency to cover any transaction costs. This means that banks are no longer forced to provide liquidity in different currencies, but can instead fall back on an XRP token pool. The respective national currency is exchanged for XRP and after the transfer via the RippleNet it is exchanged for the target currency.

criticism

However, due to its function in the traditional financial and banking system, Ripple is partly controversial in crypto circles. In addition, there is only a certain amount of XRP Coins in free circulation. Of the fixed 100 billion tokens, Ripple holds 61.4 billion tokens in escrow wallets and thus owns more than half. Critics see this as a lack of decentralization.