Xumm Founder Compares XRP to Bus Tickets, Says XRPL Hardly Used To its Capacity

Xumm and XRPL Labs founder discusses the role of XRP as a resource for consuming network capacity on the XRPL, highlighting user speculation.

Discussions about XRP’s function within the XRP Ledger (XRPL) have emerged. Amid the conversation, Wietse Wind, founder of XRPL Labs and Xumm, asserted that XRP is simply a resource for network capacity consumption on the XRPL.

The conversation delves into the nature of XRP’s role in the network. Vet, an XRPL DUNL validator, triggered the discourse with an initial comment in which he sought to dispel the notion that XRP is a gas token on the XRPL. 

XRP is not a gas token. Gas implies a auction mechanism where you bid with XRP on gas, much like you bid with ETH on gas to be included by validators.

You can’t do that on the XRPL.

That itself can be seen as a utility tho. Maybe we need gas ⛽️
But no incentive is the best… pic.twitter.com/kqSFD5HSEk

— Vet 🏴‍☠️ (@Vet_X0) August 24, 2023

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Vet emphasizes that XRP does not operate using an auction-style mechanism where users bid to secure transaction processing, akin to the way Ethereum’s gas fees function. As a result, he does not see XRP as a gas token.

Xumm Founder Reacts

In response, Wietse Wind elaborates on the nature of transaction processing. He argues that the XRPL still uses a bid mechanism, but this bid approach goes into burning XRP.

It’s a bid (to burn) as well on XRPL: no one ever noticed because the ledger is hardly being used compared to its capacity, but I remember the fees escalated and higher fees would get your TX in. In times of congestion, higher fee wins.

— WietseWind (🛠+🪝 Xumm @ XRPL Labs) (@WietseWind) August 24, 2023

Notably, fees on the XRPL automatically move to the burn address. This approach eliminates instances of spam transactions – a different structure from other networks. 

Wind acknowledges that while XRPL does not employ auction-style bidding for transaction inclusion, there exists a mechanism where users can offer higher XRP fees to ensure faster transaction processing. 

He likens the network’s operation to a bus system, where XRP is the means to access network capacity. Transactions can proceed with standard XRP fees if the network is less crowded. 

However, during congestion, users can ensure their transactions are processed ahead of others by paying higher fees. This rarely happens because the XRPL is not utilized to full capacity and is often “empty.”

XRP is a Resource to Consume Network Capacity

Amid the discussion, Wind’s idea that XRP is merely a resource for consuming network capacity caught the attention of some proponents. 

“At the end of the day, XRP is simply what you use to consume network capacity like bus tickets. And if the bus is full, you can kick someone out by paying more for a ticket. The bus is usually pretty empty,” Wind remarked.

At the end of the day, XRP is simply what you use to consume network capacity. Like bus tickets. And if the bus is full you can kick someone out by paying more for a ticket. The bus is usually pretty empty.

Speculation on the need for bus tickets is basically what’s happening.

— WietseWind (🛠+🪝 Xumm @ XRPL Labs) (@WietseWind) August 24, 2023

This concept sprang up last month when an XRP community member argued that XRP is just a gas token for the XRPL. Notably, David Schwartz, Ripple’s CTO, agreed with this notion.

Wind’s comments further reaffirm the idea. However, the XRPL Labs founder further asserts that the market ruckus surrounding XRP is just investors speculating on the need for more XRP tokens, which he believes are just “bus tickets.”