Company: TOXR
Filing Date: 2025-10-10
Form Type: S-1/A
Source: 0001213900-25-098141
Chunk: 77

Company: 21Shares XRP ETF
Filing Date: 2025-10-10
Form: S-1/A
Chunk 77
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 underlying digital assets generally could negatively affect the demand for all digital assets, including XRP, and therefore adversely affect the value of the Shares.

Mathematical or technological advances could undermine the XRP Ledger’s consensus mechanism.

The XRP Ledger is premised on multiple persons competing to solve cryptographic puzzles quickly. It is possible that mathematical or technological advances, such as the development of quantum computers with significantly more power than computers presently available, could undermine or vitiate the cryptographic consensus mechanism underpinning the XRP Ledger.

The XRP Ledger faces scaling challenges and efforts to increase the volume of transactions may not be successful.

Many digital asset networks face significant scaling challenges due to the fact that public blockchains generally face a tradeoff between security and scalability. One means through which public blockchains such as the XRP Ledger achieve security is decentralization, meaning that no intermediary is responsible for securing and maintaining these systems. For example, a greater degree of decentralization generally means a given digital asset network is less susceptible to manipulation or capture.

As the use of digital asset networks increases without a corresponding increase in transaction processing speed of the networks, average fees and settlement times can increase significantly. Increased fees and decreased settlement speeds could preclude use cases for XRP and could reduce demand for and the price of XRP, which could adversely impact the value of the Shares.

There is no guarantee that any of the mechanisms in place or being explored for increasing the scale of settlement of XRP Ledger transactions will be effective, or how long these mechanisms will take to become effective, which could adversely impact an investment in the Shares.

Smart contracts are new and their ongoing development and operation may result in problems or be subject to errors or hacks, which could reduce the demand for XRP or cause a wider loss of confidence in the XRP Ledger, either of which could have an adverse impact on the value of XRP.

Since smart contracts
typically cannot be stopped or reversed, vulnerabilities in their programming (i.e., coding errors) can have damaging effects. For instance,
coding errors may potentially create vulnerabilities that allow an attacker to drain the funds associated with the smart contract, cause
issues or render the protocol unusable. Hackers have exploited vulnerabilities in various smart contract implementations, that have resulted
in the loss of digital assets from accounts. In some cases, smart contracts can be controlled by one or more “admin keys”
or users with special privileges, or “super users”. These users may have the ability to unilaterally make changes to the
smart contract, enable or disable features