$11B Asset Manager Sets the Record Straight on XRP Biggest Misconceptions

21Shares AG, a major asset manager with $11 billion in global AUM, has addressed several misconceptions surrounding XRP, including the belief that Ripple controls the XRPL.

Launched in 2012, XRP remains one of the oldest and most enduring digital assets in the blockchain industry. Despite its long history, XRP continues to face misconceptions about its technology, governance, and purpose.

In its guide, “What is XRP? A guide to one of crypto’s veterans,” 21Shares distinguishes between XRP, the XRPL, and Ripple while examining the network’s design, transaction model, supply mechanics, and role in global payments.

Ripple Does Not Control the XRP Ledger

One of the biggest misconceptions 21Shares addresses is the belief that Ripple controls XRP or the underlying blockchain.

The asset manager explains that Ripple is a private technology company, while the XRPL operates as an open, decentralized public blockchain and XRP serves as its native asset.

According to 21Shares, Ripple operates only one of the 35 validators on the XRPL’s default Unique Node List (UNL). Meanwhile, more than 150 known validators operate across the broader network, including universities, exchanges, businesses, and individuals.

Therefore, running a validator does not give Ripple unilateral control over the ledger. As 21Shares puts it, “Inventing the road [is not the same as] controlling the traffic.”

Although Ripple remains the ecosystem’s most prominent contributor, the XRPL remains open to developers, financial institutions, exchanges, and businesses that want to build on the network.

XRP, XRPL, and Ripple Have Different Roles

21Shares also clarified the distinction between XRP, the XRPL, and Ripple, as these terms are often used interchangeably despite referring to different entities.

In simple terms, the XRPL is the blockchain, XRP is its native digital asset, and Ripple is the company that develops payment and custody infrastructure using the network.

The relationship between Ripple and XRP also has a complex history. At launch, the founders gifted 80 billion of the 100 billion XRP supply to Ripple to support development. Then, in 2017, Ripple placed 55 billion XRP into escrow. Around 34 billion XRP remain in escrow today, according to 21Shares, with releases following a public schedule.

However, Ripple’s ownership of XRP does not give the company ownership or control of the underlying decentralized network.

XRP Has a Fixed 100 Billion Supply

21Shares also highlights XRP’s distinct supply structure.

All 100 billion XRP were created when the ledger launched. As a result, the network does not depend on mining or inflationary issuance to create new coins, and no additional XRP can be issued beyond the original supply.

Instead, the circulating supply gradually declines because the network permanently destroys a small amount of XRP whenever it processes a transaction.

The mechanism primarily helps protect the XRPL against spam attacks by making transactions costly enough to discourage abuse. At the same time, it permanently removes XRP from circulation.

According to 21Shares, more than 14 million XRP have been burned through this mechanism to date.

XRPL Targets Payments While Expanding Into Other Use Cases

According to 21Shares, the XRPL can settle transactions within three to five seconds at a cost of roughly $0.0002, while relying on a low-energy consensus mechanism rather than mining.

Moreover, the network’s architecture makes it well suited for payments, with XRP functioning as a bridge asset. This model can allow value to move between currencies without relying entirely on traditional correspondent banking networks.

For example, a payment can be converted into XRP, transferred across the XRPL within seconds, and then converted into another currency. 21Shares points to financial and payment institutions such as Japan’s SBI Holdings and Malaysia-based Tranglo as examples of the network’s payment-focused infrastructure.

However, the XRPL has expanded beyond payments. It now supports decentralized trading, stablecoins, and tokenized real-world assets. The asset manager specifically highlights Ripple’s RLUSD stablecoin, which had reached $2.4 billion, alongside roughly $4 billion in tokenized assets represented on the XRPL.

Meanwhile, 21Shares is also an established participant in the XRP ecosystem. The asset manager is one of the issuers of a spot-based XRP ETF. Its XRP ETF ranks as the fourth-largest among XRP ETFs, with $157 million in net assets, compared with $1.51 billion in cumulative net assets across the category.