Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 71

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 71
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 fork would
be the existence of two versions of XRP running in parallel, and the creation of a new digital asset which lacks interchangeability with
its predecessor. This is in contrast to a “soft fork,” or a proposed modification to the software governing the network that
results in a post-update network that is compatible with the network as it existed prior to the update, because it restricts the network
operations that can be performed after the update.

Forks occur for a variety
of reasons. A fork could occur after a significant security breach. Participants on the network could elect to “fork” the
network to its state before the hack, effectively reversing the hack. A fork could also be introduced by an unintentional, unanticipated
software flaw in the multiple versions of otherwise compatible software users run. Such a fork could adversely affect XRP’s viability.
It is possible, however, that a substantial number of users and validators could adopt an incompatible version of the digital asset while
resisting community-led efforts to merge the two chains. This would result in a permanent fork. For example, in July 2016, Ethereum
“forked” into Ethereum and a new digital asset, Ethereum Classic, as a result of the Ethereum network community’s response
to a significant security breach in which an anonymous hacker exploited a smart contract running on the Ethereum network to syphon approximately
$60 million of ether held, a distributed autonomous organization into a segregated account. In response to the hack, most participants
in the Ethereum community elected to adopt a “fork” that effectively reversed the hack. However, a minority of users continued
to develop the original blockchain, now referred to as “Ethereum Classic” with the digital asset on that blockchain now referred
to as Ethereum Classic, or ETC. ETC now trades on several digital asset exchanges.

A fork may occur as a result
of disagreement among network participants as to whether a proposed modification to the network should be accepted. For example, on August 1,
2017, after extended debates among developers as to how to improve the Bitcoin network’s transaction capacity, the Bitcoin network
was forked by a group of developers and miners resulting in the creation of a new blockchain, which underlies the new digital asset “Bitcoin
Cash.” Bitcoin and Bitcoin Cash now operate on separate, independent blockchains. Since then, the Bitcoin network has forked several
times to launch new digital assets, such as Bitcoin Gold, Bitcoin Silver and Bitcoin Diamond.

Significant forks are typically
ann