The XRP community has recently been engaged in lively discussions and confusion surrounding the idea of introducing incentives on the XRP Ledger (XRPL). This topic has garnered significant attention from Ripple executives and developers. While some developers have expressed interest in exploring incentives on the XRPL, there seems to be a misunderstanding regarding the intentions behind this proposal.
One of the XRPL ambassadors, Daniel Keller, who is also the CTO at Eminence, conducted a poll on Twitter to gauge the community’s opinion on introducing incentives. Surprisingly, 78% of the respondents answered “yes”, possibly assuming that the XRPL could adopt an on-chain staking mechanism similar to Ethereum.
However, Keller quickly clarified his intention, stating that he was not talking about Proof of Stake (PoS) but rather a solid on-chain replacement for something like the Bitrue PowerPiggy with a Hook or smart contracts. This distinction is important as it demonstrates that his focus was on exploring alternative on-chain mechanisms for users to earn rewards, rather than implementing a PoS consensus mechanism.
The discussion gained further momentum when David Schwartz, Ripple’s Chief Technology Officer, expressed his confusion about the request for staking and questioned the source of the yield. He asked, “What would the source of the yield be?”
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In response, Keller emphasized his desire to contrast a centralized third-party solution with a genuine on-chain alternative, acknowledging that the origin of the yield was a separate matter to be considered.
Another Ripple developer, Neil Hartner, who is working on On-Demand Liquidity, contributed to the conversation by highlighting the distinction between staking for consensus and locking up XRP for a yield. He advocated for an on-chain option to earn yield but stated that he would not support a switch to PoS consensus.
Keller concurred with Neil’s viewpoint, clarifying that his proposal revolved around the execution of solutions via hooks or smart contracts, unrelated to the consensus mechanism.
Wietse Wind, a renowned developer of the XUMM wallet, added to the discussion by commending the progress made by developers in testing “Burn to Mint” (B2M) on the Hooks V3 Testnet. He expressed his excitement about the fact that B2M is already working on the testnet and highlighted the importance of such developments for the real-world adoption of the XRPL.
Wo Jake, another XRP developer, shared his thoughts on the XRPL’s incentive model. He emphasized the need for an improved model, stating that its shortcomings have hindered the XRPL’s real-world adoption in the past years. Jake proposed several native incentive models, such as rewards for utilizing hooks, holding XRP for a specific duration, and locking up XRP. He suggested that users would need to actively participate in network activities to redeem their rewards, fostering research and development, encouraging community engagement, and attracting more participants to the XRPL ecosystem.
In conclusion, while Ripple executives and community developers do not desire a consensus-based incentive model like Proof of Stake, the idea of holding XRP becoming more lucrative in the future is gaining traction. The introduction of native incentive models may pave the way for greater community engagement and adoption of the XRPL ecosystem. However, which idea will ultimately prevail remains to be seen.
As of the time of writing, XRP is trading at $0.4671, continuing its sideways trend. The ongoing discussions and developments surrounding incentives on the XRPL may have an impact on the future price and adoption of XRP.
