Brief
- J. Ayo Akinyele of RippleX presented early concepts for enabling native staking on XRPL, including reward distribution and protocol restructuring.
- CTO David Schwartz proposed two high-level models: one involving a dual-layer validation system, another leveraging fees for zero-knowledge proofs.
- Executives have warned that staking remains technically viable but far from being implemented due to its complexity and potential design risks.
Ripple executives have begun openly discussing the possibility of bringing XRP into DeFi by enabling staking initiatives on its blockchain designed to align incentives between validators and token holders.
The idea was first floated by J. Ayo Akinyele, head of engineering at RippleX, an initiative that helps developers build on XRP Ledger.
“When I think about how the XRP utility could continue to grow alongside new capabilities, a question naturally arises,” Akinyele wrote in a statement. blog post Wednesday.
These include enabling the XRP Ledger to support native staking and whether this would be a net benefit to the network design and native token of the protocol.
Staking encourages “long-term participation and can enhance security by rewarding those who help maintain consensus,” Akinyele added.
To make staking possible, there must be a “source of staking rewards” and “distribute them equitably,” Akinyele said, explaining that this would require restructuring at base levels.
Staking refers to the process of locking up specific crypto assets to help secure a given network and earn participants’ protocol-defined rewards.
Staking also typically involves redistributing transaction fees, which XRPL is currently burning, to keep supply deflationary and help maintain network efficiency.
The XRP Ledger was initially designed for efficient global value transfer and liquidity, particularly for cross-border payments. The concept would help XRP maintain its advantage following XRP’s adoption by digital asset treasuries and exchange-traded funds, according to Akinyele.
However, the introduction of staking would challenge fundamental principles of the ledger, such as the proof of association mechanism, which prioritizes trust and stability over financial incentives.
Despite these challenges, David Schwartz, CTO of Ripple, floated two conceptual ideas to integrate staking into XRPL in a subsequent project. tweet.
The first involves a two-tier consensus model with an internal incentive layer.
The dual-layer system would involve an “inner” layer of around 16 validators, selected by the “outer” layer based on the stake. It would then manage the progress of the ledger through staking and reduction mechanisms to avoid issues such as double signing, Schwartz explained.
The outer layer, which would involve current validators without a staking component, would oversee changes and fees and control the inner layer.
The second would retain the current consensus structure but use fees for zero-knowledge proofs. ZK proofs are a cryptographic way to prove that a statement is true without sharing additional details, allowing for trustless verification.
While these ideas are “technically promising,” they won’t be “practical” anytime soon due to “complexity, effort and risk,” Schwartz added, lowering staking expectations.
XRP is up 0.2% over 24 hours and is currently trading at $2.13, according to CoinGecko data.
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