Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 84

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 84
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 various machines with varying levels
of efficiency, the process consumes a significant amount of energy. Driven by concerns around energy consumption and the impact on public
utility companies, various states and cities have implemented, or are considering implementing, moratoriums on mining activity in their
jurisdictions.

Unlike proof-of-work and proof-of-stake
systems, the Ripple Protocol Consensus Algorithm utilized by the XRP Ledger is extremely lightweight in terms of energy usage. Notwithstanding,
the operations of digital asset networks, including the XRP Ledger, can consume significant amounts of electricity, which may have a negative
environmental impact and give rise to public opinion against allowing, or government regulations restricting, the use of electricity for
the operations of digital asset networks.

The operations of the XRP and
other digital asset networks may also consume significant amounts of energy, even though the XRP Ledger is generally considered to consume
significantly less energy than other digital asset networks that utilize proof-of-stake or proof-of-work transaction validation mechanisms.
Further, in addition to the direct energy costs of performing calculations on any given digital asset network, there are indirect costs
that impact a network’s total energy consumption, including the costs of cooling the machines that perform these calculations.

Validators may cease participating in validating activities because they are provided no direct financial incentive to participate or because certain jurisdictions may limit or otherwise regulate validating activities, which could negatively impact the price of XRP and the value of the Shares.

Unlike many other blockchain
networks, validators on the XRP Ledger are not directly compensated for their participation in the consensus process. Running a validator
on the XRP Ledger is generally considered a voluntary contribution to the health and decentralization of the network. Participants run
validators for reasons other than direct financial gain, such as supporting the network’s decentralization, ensuring its security,
or for reputational benefits within the XRP community. However, because there is no financial incentive for entities or individuals to
maintain validators, there is no guarantee that such entities or individuals will continue to do so. Additionally, entities or individuals
running validators in certain jurisdictions may be limited or prohibited from continuing these activities as a result of regulation or
governmental decree.

Validators ceasing operations
or participation in the consensus mechanism would make the XRP Ledger more vulnerable to malicious actors obtaining sufficient control
to alter the blockchain and hinder transactions. Any reduction in confidence in the confirmation process and security of the XRP Ledger
may adversely affect the Trust’s investments in XRP. To the extent that