Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 79

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 79
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01 on November 7, 2016 in the midst of a broader sell off of ZEC beginning immediately after the Zcash Network launch
on October 28, 2016.

Cancer nodes.

Cancer nodes are computers
that appear to be participating in the XRP Ledger but that are not in fact connected to the XRP Ledger, which a malicious actor sets up
to place users onto a separate network or disconnect them from the XRP Ledger. By using cancer nodes, a malicious actor can disconnect
the target user from the XRP economy entirely by refusing to relay any blocks or transactions.

Double-spending risks.

The XRP Ledger is designed
to be resistant to double-spending risks through the Ripple Protocol Consensus Algorithm. The Ripple Protocol Consensus Algorithm ensures
that once a transaction is confirmed by a supermajority of trusted validators, it is immutable and cannot be reversed. This immediate
finality is a key defense against double-spending. Additionally, transactions on the XRP Ledger are atomic, meaning they are either fully
executed or not executed at all. This prevents any partial completion that could lead to inconsistencies or double-spending. Nonetheless,
if the consensus mechanism fails (e.g., due to a significant portion of validators being compromised), conflicting transactions could
potentially be validated by different parts of the network. Additionally, if a malicious actor controlled or colluded with a supermajority
of validators, they could attempt to manipulate the ledger to allow a double spend. However, this would require controlling or influencing
over 80% of the trusted validators on the majority of UNLs (Unique Node Lists), which is considered highly improbable given the nature
of the validators. A highly sophisticated network attack that isolates parts of the network could theoretically lead to inconsistent views
of the ledger. However, this would require an advanced and coordinated effort, and even then, the network’s design aims to prevent
such scenarios from resulting in double-spends.

Flaws in source code.

It is possible that flaws or
mistakes in the released and public source code could lead to catastrophic damage to XRP, the XRP network, and any underlying technology.
It is possible that contributors to the XRP network would be unable to stop this damage before it spreads further. It is further possible
that a dedicated team or a group of contributors or other technical group may attack the code, directly leading to catastrophic damage.
In any of these situations, the value of Shares of the Trust can be adversely affected.

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