Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 124

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 124
---
 on mining, transaction
fees are extremely low (typically a fraction of a cent per transaction).

Although launched in 2012,
the concept for XRP and the XRP Ledger traces back to 2004 when a web developer started work on a decentralized payment system that would
enable users to create and trade their own digital assets in a peer-to-peer manner. More of an alternative payment system than a digital
asset itself, it laid the conceptual foundation of what would become XRP and the XRP Ledger. The project was eventually handed over to
Jed McCaleb, Arthur Britto and David Schwartz in 2011 who were seeking to address some of their concerns related to the scalability of
bitcoin and the energy intensive nature of the “proof-of-work” validation mechanism utilized by the Bitcoin network that relied
on “mining.” Their goal was to create a decentralized ledger that used a network of validators that would agree on transactions
in a fast and secure manner, without relying upon mining. This led to the development of a consensus-based algorithm, the Ripple Protocol
Consensus Algorithm. It is this mechanism, as opposed to the proof-of-work mechanism utilized by the Bitcoin blockchain or the “proof-of-stake”
mechanism utilized by the Ethereum network, that allows the XRP Ledger to be fast, energy-efficient and scalable, and therefore suitable
for its most prominent use case, the facilitation of cross-border financial transactions. Proponents of this mechanism often cite several
key advantages it offers. The first is near-instantaneous settlement of transactions, which normally occurs within 3 – 5
seconds. The second is energy efficiency. Unlike proof-of-work systems, which require massive computational power to secure the network,
the consensus-based mechanism is relatively light in terms of energy usage, as it relies on trusted validators rather than mining. A third
advantage is scalability. The XRP Ledger can handle up to 1,500 transactions per second, far more than the Bitcoin or Ethereum blockchain.
This makes the XRP Ledger an attractive option for high-volume use cases, such as cross-border payments. Lastly, because validators do
not need to spend resources on mining, transaction fees are extremely low (typically a fraction of a cent per transaction).

Transactions are validated
on the XRP Ledger by a network of independent validator nodes. These nodes do not mine new blocks but participate in a consensus process
to ensure that transactions are valid and correctly ordered on the XRP Ledger. Any node can be a validator, but for practical