Sidechains pay, XRPL won’t — the real tug-of-war over staking and XRP’s future
The XRPL’s oddball design and why it resists staking
Think of the XRP Ledger as a scrappy, no-frills little payments engine that never got caught up in crypto’s yield-chasing fever. Built with speed, predictability and a minimalist mindset, it doesn’t hand out block rewards or bribe validators with interest. Instead, it runs on a trust-list style consensus (Unique Node List) where validators are chosen for reliability, not for how much yield they can extract.
That setup made XRPL a reliable bridge and settlement tool for years, but it also leaves the ledger looking a bit plain next to the flashy DeFi chains that dangle staking rewards like candy. Those reward-driven systems attract liquidity, protocols and speculative capital — things XRPL historically shrugged off by design.
Engineers and leaders in the XRPL ecosystem have been clear: introducing native staking would force the ledger to invent a source of rewards and a safe way to hand them out without wrecking the network’s carefully balanced neutrality. The main worries are pretty practical — add money to any system and behavior changes. Operators start chasing cost-savings, validators cluster in the same cloud regions or cheap hardware, and that slowly eats away at decentralization. You can also open the door to Sybil-style shenanigans if fee redistribution or reward schemes aren’t designed with surgical precision.
There are clever-sounding experiments on the whiteboard — layered stake-based consensus or zero-knowledge proof helpers for smart contracts — but critics warn these ideas are far from turnkey. They may solve hypothetical problems but bring their own risks, complexity and trade-offs to a ledger that was never built around them.
How the market is getting its yield anyway — sidechains, wraps and the great escape
If XRPL itself won’t play the yield game, capital will politely walk out the door and go find it elsewhere. That’s exactly what’s happened: people are wrapping XRP, deploying it onto EVM-compatible sidechains, or using liquid-staking vehicles so holders can earn returns while staying attached to XRP’s economic story.
Case in point: liquid staking tokens built around XRP on sidechains have pulled meaningful value into adjacent DeFi ecosystems. These wrapped or staked versions let XRP sit in pools, collateral vaults and lending markets, generating annualized returns that the core ledger simply doesn’t offer. The result? New incentive layers have sprung up just off the main chain, soaking up liquidity and activity that might otherwise have stayed on XRPL.
That dynamic highlights a real choice: make XRPL more yield-friendly and risk changing what makes it useful, or keep its lean architecture and watch users layer incentives on top of it externally. Native on-chain yield could attract a different class of investor, deepen liquidity and turn XRP into a more ‘productive’ asset — but it would also invite volatility, governance pressure and the very centralization behaviors XRPL was built to avoid.
On the flip side, keeping things simple preserves predictability and a clean role for XRP as an efficient settlement instrument. Growth might be slower, but stability and neutrality remain intact — which some users and enterprises actually prefer.
At the end of the day, this isn’t just a technical argument about staking mechanisms. It’s a philosophical crossroads: should XRP stay a fast, predictable bridge currency, or evolve into a yield-bearing player that behaves more like typical DeFi tokens? The next few years of sidechain experiments, wrapped assets and cross-chain tooling will probably decide whether XRPL nudges its architecture, or lets the market keep inventing yield on the sidelines.
Authors: Oluwapelumi and Liam Wright (aka “Akiba”).