Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 128

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 128
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 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 Ripple Protocol Consensus Algorithm, 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 signed, etc.). If
80% or more of the validators agree that the transaction is valid, it is included in the next ledger update.

The XRP Ledger operates in
“ledger versions,” where each version is a new snapshot of the ledger’s state, including all confirmed transactions
since the last version. When a transaction is confirmed through consensus, it is included in the next ledger version. Once the ledger
version is closed and published (which happens approximately every 3-5 seconds), the transaction is considered final and irreversible.
The recipient’s balance is updated, and the sender’s balance is deducted accordingly. In addition, a small transaction fee
(measured in drops, where 1 XRP = 1,000,000 drops) is deducted from the sender’s account. Each transaction is assigned a unique
transaction hash, which can be used to track and verify the transaction on the