The digital asset issued by Ripple - Ripple currency XRP has experienced ups and downs since late November. When its price finally soared, it was revealed that the US Securities and Exchange Commission (SEC) filed a lawsuit against Ripple and its two executives The news has become a hot topic in the currency circle.

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If you look at the cryptocurrency market capitalization rankings in recent years, you will find that there are only a handful of currencies that have been in the top ten for many years, but XRP is one of them. "The third in market value" and "cross-border payment" are the most eye-catching labels of XRP. It is committed to becoming an "intermediate bridging currency" used by financial institutions to solve global cross-border payments, in order to build a more convenient and cheaper global transfer. payment network. For a faster payment experience, Ripple adopts a new consensus algorithm, which can process more than 1,500 transactions per second, the confirmation time only takes 4 seconds, and the transaction fee is as low as 0.00001 XRP (less than 1 cent, almost zero).

For most of this year, XRP prices have remained relatively stable, hovering between $0.2-0.3. However, starting from November 19, XRP has been bullish all the way, soaring from $0.288 to $0.567 (as of December 10), an increase of nearly 97%.

This rise is mainly affected by several good news that Ripple Labs has been preparing for a long time. One is the Spark airdrop in cooperation with Flare Network in early December. As a highly scalable distributed blockchain network, Flare Network is one of Ripple's most anticipated partners. Its huge potential has made Ripple community members show great enthusiasm for participating in the Spark airdrop. The second is that Ripple Labs has been buying back XRP since the second quarter of 2020. Cryptocurrency buybacks are a way to limit inflation and maintain price stability, and according to the company's Q3 2020 report, Ripple bought back $45.55 million worth of XRP, which had a positive impact on its price. The third is that XRP provides new services. Ripple has launched a "line of credit" service on RippleNet, allowing users to instantly access funds and make payments with XRP using XRP-powered cross-border payment platform On-Demand Liquidity.

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The SEC's 71-page complaint states that one of Ripple's claims of XRP's potential uses is as a"Universal Digital Assets"Used for bank transfers across borders, but that never really came to fruition.

It is understood that Ripple mainly has three products: xCurrent, xRapid and xVia, and XRP is only a small part of xRapid products. Looking at the development of Ripple in the past two years, although the company is actively cooperating with major banks and financial institutions in cross-border transfers and payments, most of them use other technologies of Ripple Labs. The cases are rare, so the practical application of Ripple is not obvious.

And many people criticized that "XRP is very centralized, and the company has a high degree of control over the market." This is because at the beginning of the launch of XRP, a total of 100 billion pieces have been released, of which 20% are owned by the founders, and 80% are sold by the company. Therefore, the circulation in the market mainly comes from the selling of the founder and the company, and selling XRP is one of the main ways for the company to make profits.

This is also disclosed in the indictment: In the seven years from 2013 to the present, Ripple has sold a total of 14.6 billion XRP and made a profit of 1.38 billion US dollars. In the external sale of XRP, Ripple attracts institutions with a discount below the market price, incentivizing these buyers to sell XRP to the open market to achieve certain profits. In addition, the indictment also pointed out that Ripple intervened in the XRP secondary market by cooperating with good news and other means. In the above-mentioned November rally, Ripple CEO and co-founders made a total profit of about 600 million US dollars by selling XRP .

This article only represents the personal views of encrypted notebooks and does not constitute any investment opinions or suggestions.