Ripple CTO Emeritus David Schwartz has addressed a long-standing question within the XRP community: why the native token XRP has never been directly involved in the XRP Ledger (XRPL) consensus mechanism. In a detailed thread on X (formerly Twitter) on May 12, 2026, Schwartz provided two primary reasons for this design choice.
First, when the XRPL was created in 2011, the concept of Proof-of-Stake (PoS) had not yet been invented. Schwartz admitted that the founding team — himself, Jed McCaleb, and Arthur Britto — were not “clever enough” to conceive of such a system at the time. The network was originally designed as an alternative to Bitcoin’s energy-intensive Proof-of-Work, aiming for a more efficient consensus model without mining.
Second, and more significantly, integrating XRP into the consensus process would have concentrated excessive control in Ripple’s hands. Schwartz noted that if XRP were used for staking or validator selection, Ripple would have effectively controlled the consensus mechanism regardless of community preference. This would have contradicted the goal of decentralization.
Instead, the XRPL relies on a unique “shareholder choice” model. Network participants independently select trusted validators from community-curated lists, often aligning through shared software implementations. Validators do not receive block rewards or transaction fees in XRP; they simply confirm transaction ordering based on agreed-upon rules. This approach eliminates profit-driven incentives for validation.
Schwartz’s recent comments echo a presentation from six years ago titled “The Best Incentive is No Incentive”, in which he contrasted “artificial stakeholders” (miners and stakers motivated by rewards) with “natural stakeholders” — users who depend on the network for payments and liquidity. He argued that financial incentives can gradually lead to centralization as large operators outcompete smaller ones, while a trust-based system keeps power diffuse. Over its 10+ years of operation, the XRPL has maintained this consensus structure without mining or staking rewards, relying purely on community coordination and validator trust.
