Company: TOXR
Filing Date: 2025-12-10
Form Type: 424B3
Source: 0001213900-25-120172
Chunk: 134

Company: 21Shares XRP ETF
Filing Date: 2025-12-10
Form: 424B3
Chunk 134
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RP can also be held in escrow
on the XRP Ledger, meaning the XRP is locked up and released only when certain conditions are met (e.g., at a specific time or when a
particular event occurs). This is a native feature of the ledger, providing flexibility for complex financial contracts. XRP can also
be held in payment channels, which allow for off-ledger transactions to occur between two parties, with the final balance being settled
on the ledger later. Each XRP Ledger account must also hold a minimum reserve of XRP (currently 10 XRP) which cannot be spent. This ensures
that only legitimate accounts are created and maintained. The XRP Ledger supports multi-signature accounts, where multiple keys can be
required to authorize transactions. This adds an extra layer of security for holding and transferring large amounts of XRP.

Summary of an XRP Transaction

The following is a summary
of a payment transaction of XRP on the XRP Ledger.

A transaction is initiated
by a user who holds an XRP Ledger account. The user uses their wallet (software, hardware, or digital asset trading platform-based) to
create a transaction. This transaction includes details such as the destination address, the amount of XRP to be transferred, and any
additional flags or conditions (e.g., destination tag, which is used for transactions to exchanges or multi-user platforms).

To authenticate the transaction,
the user’s wallet signs the transaction using the private key associated with their XRP Ledger account. The private key is critical,
as it proves ownership of the account and authorizes the movement of funds. The signing process involves creating a cryptographic signature
unique to the transaction details and the private key. This signature ensures that the transaction cannot be altered after it is signed.

Once signed, the transaction
is submitted to the XRP Ledger. This involves broadcasting the transaction to a network of validator nodes. The transaction is propagated
across the network, where it is received by multiple validators. Validators are independent nodes that maintain a copy of the XRP Ledger
and participate in the consensus process.

The XRP Ledger uses a unique
consensus algorithm, the XRP Ledger Consensus Protocol, rather than proof-of-work or proof-of-stake. Validators participate in a consensus
round, where they agree on the set of transactions to be included in the next ledger version. During this process, validators check the
validity of each transaction (e.g., ensuring the sender has sufficient funds, the transaction is correctly