Ripple publishes the quarterly XRP Markets Report to voluntarily provide transparency and regular updates on the company’s views on the state of crypto markets such as quarterly XRP sales, relevant XRP-related announcements and commentary on market developments over the previous quarter. 

As an XRP holder, Ripple believes proactive communication and transparency are part of being a responsible stakeholder. Moreover, Ripple urges others in the industry to build trust, foster open communication and raise the bar, industry-wide.

Crypto Market Summary

At the start of Q4 2021, crypto markets grew aggressively, fueled by the SEC’s approval of the first ever BTC futures ETF in the United States. The ProShares Bitcoin Strategy ETF, which began trading on October 19th, drew a record $1B in assets in just 2 days. Its success was a reflection of strong institutional demand for BTC exposure. This was a watershed moment for the crypto industry, and the total market cap grew from $2T to $3T in the span of a month. 

In the end, however, the steep trajectory of growth was unsustainable. Not only had the market moved too far too fast, but the levels of leverage in the derivative markets became precariously high. BTC open interest peaked at $28B, surpassing the previous record of $27.2B set in Q2 2020. By the end of 2021, total crypto market cap had returned back to the $2T mark, with many digital assets ending the quarter below where they started.

With that said, not all digital assets performed the same way. Metaverse-related projects grabbed market attention in Q4 with various high profile fundraises and partnerships. Sandbox, one of the more publicized Metaverse projects, raised $93M in a round led by SoftBank and announced a digital land acquisition by Adidas. Its native token $SAND was one of the top performing assets in Q4, gaining more than 600% in the quarter. 

Buyers not only flocked to purchase the fungible tokens, but also bought virtual real estate in different metaverses. In one instance, a particular plot of digital land in Decentraland sold for over $2.43M. Although most of this activity is starting on Ethereum, just like with DeFi and NFTs, it will likely start to shift to more efficient blockchains. With the launch of XLS-20d on NFT-Devnet this month, XRP Ledger (XRPL) developers are well positioned to take advantage of this shift. 

Another unique market activity in Q4 was the proliferation of airdrops for token distribution. Airdrops happened across several blockchains, including Cosmos, Ethereum, Solana, Avalanche, and XRPL. On the XRPL, there were over 31 million trustline transactions and more than 50 different tokens were airdropped in Q4. The Sologenic airdrop was one of the more high profile airdrops on XRPL, establishing more than 340,000 trustlines. 

Interoperability was also a big theme this quarter, with bridges driving a lot of market activity. In fact, total value locked in bridges increased from $11.5B to $26.5B in the span of just three months, as users looked to move assets across chains. XRPL saw a similar trend with a number of bridging solutions announced including WXRP and Allbridge. 

NFT Spotlight 

After hitting record highs in August, NFT trading cooled down in Q4. OpenSea remained the number one NFT marketplace, but volume share slipped from 95% to under 80%. The industry continues to see Solana-based marketplaces chip away at Ethereum’s dominance as high gas fees plague both creators and traders. 

Q4 saw heightened interest in launching NFTs on the XRPL as projects issued IOUs on the XRPL that would later be redeemed for NFTs. With the release of XLS-20d on NFT-Devnet in January 2022, a standard that provides access to XRPL-native NFT capabilities, developers have an accessible and reliable environment to experiment with NFTs on the XRP Ledger.

Unfortunately, NFT scams – across blockchains – continued to be a concern. This underscores the importance of due diligence as there are no white listed standards for NFT projects. One platform, OnXRP.com has proposed a set of listing requirements for NFT projects on their platform, including KYC & Global ID. 

The State of Global Regulation 

The industry continues to see more global regulators take a public stance on crypto, with many calling for thoughtful regulation to outright bans of this technology. Ripple released a policy framework, designed to offer an immediate and pragmatic way forward that accounts for the dynamic capabilities of cryptocurrency and digital assets.

In the U.S., crypto executives testified in front of the U.S. House Committee on Financial Services in December 2021, and SEC Commissioner Hester Peirce expressed her disappointment over the absence of crypto on SEC Chair Gary Gensler’s regulatory agenda. The SEC also continued its pattern of delaying or denying spot Bitcoin ETF proposals, much to the frustration of industry officials, some of whom may be preparing to file suit against the SEC over its position. Finally, the U.S. continued to take a close look at stablecoins, with the President’s Working Group on Financial Markets, together with the Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC), issuing a report recommending that Congress require stablecoin issuers be FDIC-insured banks.

Globally, Australian lawmakers proposed significant reform of digital asset regulations, citing core principles from Ripple’s policy framework. These recommendations were accepted by the Treasury, and the consultations on the regulatory changes are expected in 2022. India and Thailand also intend to consult the industry on regulatory frameworks for digital assets in 2022. South Africa and Nigeria touted the need for regulation as crypto adoption increases, while the Bank of England looked to tighten its oversight of crypto. The Dubai government announced that the Dubai World Trade Centre will become a comprehensive free zone and regulator for digital assets and crypto.   

Q4 (and part of Q1 2022) Update on the SEC Lawsuit against Ripple

December 22 marked the one year “anniversary” of the SEC lawsuit against Ripple – and the company continues to seek clear regulatory guidance within the U.S. Notably, the Wall Street Journal published a Letter to the Editor from Ripple CEO Brad Garlinghouse in response to former SEC Chairman Jay Clayon touting the promise of crypto technologies and the need for additional U.S. regulation, stating Clayton’s change of heart was “staggeringly ironic.”

The expert discovery deadline has been extended to February 28 due to COVID and personal matters. On January 13, the court ordered the SEC to surrender several documents to Ripple, including emails about and drafts of former SEC Corporation Finance Director Hinman’s June 2018 speech in which he stated ETH is not a security, as well as notes taken by SEC attorneys during meetings with third parties in the digital asset space.

RippleNet EOY Momentum

2021 was RippleNet’s most successful and lucrative year to date as global momentum skyrocketed with customer demand despite the headwinds from the SEC. The number of transactions on RippleNet more than doubled, with a payment volume run rate of over $10B. This is a testament to the product considering Ripple parted ways with Moneygram, its largest customer, immediately after the SEC filed its lawsuit against Ripple. With over 20 payout markets for On-Demand Liquidity (ODL), most recently adding the Middle East, RippleNet continues to see more global demand for the product. Most notably, APAC continues to be one of the largest contributors of ODL volume on RippleNet, more than doubling in 2021. 

Disciplined, Responsible Stakeholders: Q4 Sales and Purchases

Last quarter, total XRP sales by Ripple, net of purchases, were $717.07M vs. $491.74M USD the previous quarter. Ripple continued to engage in sales to improve the ODL experience of certain customers, eliminating the need for pre-funding at exchanges and enabling instant global payments. As has been the case since Q4 2019, Ripple did not conduct programmatic sales in Q4.

*All ODL-related sales are attributed to the growth and adoption of ODL

**Note: Figures were compiled using the CryptoCompare API for daily TopTier aggregate volumes which reflects total XRP volume in dollars by exchanges that CryptoCompare lists in the TopTier. 

Ripple has been a buyer of XRP in the secondary market and expects to continue to undertake purchases in the future at market prices as ODL continues to gain global momentum.

Total sales by Ripple, net of purchases, ended the quarter at 43 bps of global XRP volume according to CryptoCompare TopTier (CCTT) volumes. 

Leases

Certain wallets that are being used for XRP sales also provide short-term leases to market makers. This is worth noting given they are often incorrectly interpreted by market participants as sales. Leases are ultimately returned to Ripple. Total leases outstanding in Q4 2021 were 88 million XRP.

Reported Volume

XRP volumes peaked on November 10th, as the crypto market cap hit new all time highs. Overall volumes declined 12% QoQ. 

Escrow

In Q4 2021, three billion XRP were released out of escrow (one billion each month) in line with prior quarters and the official escrow arrangement. In total, 2.4 billion XRP were returned and subsequently put into new escrow contracts throughout the quarter. For more information on the escrow process, see here. Note: All figures are reported based on transactions executed during the quarter.

XRP Infrastructure Update

Digivault was the first fully UK Financial Conduct Authority (FCA) registered crypto asset firm to launch support for XRP, fostering the growth of Digivault compliant and risk-focused custody solutions for corporates and high net worth individuals. In addition, Delta Exchange became the first CeFi exchange globally to launch XRP options.

Interoperability

Tokensoft’s launch of Wrapped XRP ($WXRP) created another avenue for XRP holders to access the Ethereum blockchain, in addition to the upcoming Flare Network and existing Wanchain bridge. In January 2022, Binance announced support for WXRP deposits and withdrawals, so users could frictionlessly switch between networks. Finally, XRPL will soon be integrated with Allbridge, linking the XRPL to 12 different blockchains including Solana, Terra, Avalanche and Polygon. This integration allows XRP to transfer seamlessly onto these chains, as well as making it possible for assets like SOL, LUNA, and USDC to be transferred onto XRPL.

Building with the XRP Community

XRP Ledger On-Chain Activity, Grants and Hackathon 

Last quarter, there was a dramatic increase in activity on the network with a total of 130M transactions on the XRP Ledger with $113B transacted via 114 billion XRP in volume. 

Sponsored by RippleX and supported by an independent judging committee, XRPL Grants support the independent developer community building projects of all types on the XRP Ledger and accelerating the Internet of Value. Last quarter, XRPL Grants collected over 100 new applications, with a focus on Federated Sidechains, from the XRPL community. These projects are currently being evaluated, with awardees to be announced in Q1 2022. Meanwhile, prior grantees continued building their projects and contributing to open-source projects. Grantees with notable progress this quarter include Bithomp, Trustline app and ZerpCraft.

More broadly, the community continues to see more projects and apps to address a variety of use cases including Nerian, a network that consolidates data available about a user, and Ridworld, a NFT card game. In addition, an XRPL Hackathon on Devpost inspired a number of software developers to build innovative new projects including:

Stability Issues

On November 3, the XRP Ledger halted for approximately 15 minutes in response to several validators experiencing issues. Unlike some other blockchains, the XRPL network recovered automatically and without any human intervention, as it is designed to do, resuming operation albeit under a higher-than-normal load. This resulted in elevated transaction fees and a large transactions queue. That said, elevated fees were still minuscule by comparison to other blockchain fees, remaining at fractions of a penny (0.000240 XRP) versus regular levels (0.000012 XRP). 

Together with community members and infrastructure operators, developers worked 24/7 to identify several bugs and develop key optimizations, improving both performance and stability. As server operators upgraded to version 1.8.2 of the XRPL server software, the transaction queue backlog was worked through, transaction fees returned to normal levels and the network stabilized.

Going Green with XRPL

In December, Xange.com announced it will develop a carbon credit solution on the XRPL given its performance, scalability and inherently green attributes. The XRP Ledger was built with sustainability in mind and is one of the first major carbon-neutral blockchains. Due to its Federated Consensus algorithm, the XRPL is significantly more energy-efficient compared to proof-of-work blockchains and ensures low-cost transactions.

Global CBDC Momentum

Ripple joined the Digital Pound Foundation to focus on the development and implementation of a digital Pound in the United Kingdom, and continued to engage central banks globally on technical and policy queries related to CBDCs. In addition, Ripple partnered with the Republic of Palau to explore developing strategies for cross-border payments and a USD-backed stablecoin directly on the public XRP Ledger. This could see the implementation of the world’s first government-backed national stablecoin, leveraging the XRPL’s built-in DEX and tokenization advantages.

Russia’s recent ban on crypto has drawn criticism from a number of big names, including Alexei Navalny’s chief of staff Leonid Volkov, and Telegram founder Pavel Durov.

On Jan. 20, Russia’s Central Bank published a report proposing a blanket ban on domestic crypto trading and mining. The report stated that the risks of crypto are “much higher for emerging markets, including Russia.”

However, it appears that this proposed ban isn’t universally accepted in the former Soviet Union. A Jan. 22 post by the Telegram founder, Pavel Durov stated that the proposed ban on crypto would “destroy a number of sectors of the high-tech economy.” He added:

“Such a ban will inevitably slow down the development of blockchain technologies in general. These technologies improve the efficiency and safety of many human activities, from finance to the arts.”

While Durov conceded that the “desire to regulate the circulation of cryptocurrencies is natural on the part of any financial authority,” he concluded that “such a ban is unlikely to stop unscrupulous players, but it will put an end to legal Russian projects in this area.”

Leonid Volkov: banning crypto is “impossible”

Meanwhile, in a Telegram post on Jan 20. Volkov, who is the chief of staff for Alexei Navalny, wrote that the ban would be like “calling a spade a spade.”

Navalny is an opposition leader in Russia and founder of The Anti-Corruption Foundation (FBK). In August 2020, he was poisoned with the nerve agent Novichok. After recovering in Germany, he returned to Russia in January 2021 where he was arrested and has remained imprisoned since.

In his announcement, Volkov referenced a Jan. 20 report by Bloomberg. It claimed that Russia’s Federal Security Service (FSB) was instrumental in advancing the ban because crypto can be used to finance “non-systemic opposition and extremist organizations.”

He went on to add that he was “sure that the Bloomberg version, in this case, is 100% close to reality, but nothing will happen” because Russians are more likely to use crypto to buy drugs rather than donate it to the Moscow-based non-profit FBK.

“Technically, banning cryptocurrency is the same as banning person-to-person transfers (i.e. it’s impossible)… Yes, they can make it very difficult to deposit funds on crypto exchanges, which means that intermediary services will simply appear that will do this through foreign jurisdictions. Yes, transaction costs will rise. Well, that’s all, I guess.”

Related: Bank of Russia governor: Banning crypto in Russia is ‘quite doable’

Many of Russia’s neighbors have also taken a hard-line stance on crypto. On Jan. 19, citizens in neighboring country Georgia were made to swear an oath to cease mining crypto. The governments of Kosovo and Kazakhstan, have also recently been added to the list of countries that have banned crypto mining.

Perhaps one exception is Russia’s neighbor Ukraine, which passed a number of laws to facilitate the country’s adoption of cryptocurrencies in September 2021.

Hackers attacked a number of popular crypto YouTuber accounts at some point during the afternoon of Jan. 23. The accounts posted unauthorized videos with text directing viewers to send money to the hacker’s wallet.

Accounts who appear to have been targeted by the attack include: ‘BitBoy Crypto’, ‘Altcoin Buzz’, ‘Box Mining’, ‘Floyd Mayweather’, ‘Ivan on Tech’, and ‘The Moon’ among others.

BREAKING: Dozens of Crypto YouTubers have had their accounts hijacked by hackers promoting a fake crypto giveaway scam. Hacked accounts include:@IvanOnTech@boxmining@aantonop@themooncarl@Bitboy_Crypto@mmcrypto@Altcoinbuzzio@FloydMayweather@crypto_banter@CoinMarketCap pic.twitter.com/ykXkZUh9cO

— Mr. Whale (@CryptoWhale) January 23, 2022

The Binance Smart Chain wallet address that was listed on the fraudulent videos only had a total of 9 transactions in BNB at the time of writing, with a total value of around $850.

Michael Gu told Cointelegraph that his YouTube channel Boxmining posted a video without his permission. “Luckily we caught it within two mins of the video going live and managed to delete it,” he said. “By that time there were already views and comments from my community.”

He added that he had done an internal sweep and found no viruses or bugs that may have given the hackers access to his account. “Seems like YouTube might be responsible,” he said.

Many Crypto Youtubers (including me) got hacked today – all publishing a scam video at around the same time – @IvanOnTech @aantonop @Bitboy_Crypto @Altcoinbuzzio @FloydMayweather @crypto_banter @CoinMarketCap
I have 2FA enabled. pic.twitter.com/c8z5qmJ3bT

— Boxmining (@boxmining) January 23, 2022

One Reddit post by user “9Oh8m8” suggested that it appears as though the hackers were able to gain access to the accounts using a SIM swap scam, which would have enabled them to bypass two-factor authentication (2FA). They added:

“They are all posting with a title like “ONE WORLD CRYPTOCURRENCY”. They have an address in vid and description to send your USDT/USDC/BNB/ETH to receive a new crypto called OWCY.”

However, Gu wasn’t convinced that the hack was a result of a SIM swap, telling Cointelegraph that there were no logins on his personal Google account. “If it was a SIM swap I would lose access to my phone etc and that didn’t happen,” he said.

“What we noticed was on the BRAND account (which doesn’t have a login. YouTube brand accounts are connected to personal) there was a login from the Philippines. Very likely this is either a hack on YouTube side or a rogue employee. That’s how they got so many people at the same time.”

Founder and CEO of the Altcoin Buzz YouTube channel Shash Gupta added that they noticed something was amiss at around 1 AM Singapore time on Sunday night when an unauthorized video was posted to their channel.

“It’s pretty unclear what happened. I’m talking to Youtube to get to understand the matter and avoid such further breaches.”

Related: YouTube channels hacked and rebranded for livestreaming crypto scams

Another crypto YouTuber Richard Heart tweeted at 9:30PM UTC that his channel had been banned during the middle of a livestream, indicating that YouTube was probably aware of the event.

Hello again @YouTubecreators My channel was just banned in the middle of a livestream. I think it might have to do with all of the other youtubers that were hacked at the same time today. Could you check please, thanks! @YouTube @YouTube

— Richard Heart PulseX.com! Called the Bitcoin top! (@RichardHeartWin) January 23, 2022

Cointelegraph reached out to YouTube and a number of other crypto content creators who were affected by the hack but had not received any additional information at the time of writing.

The number of ether locked in the Ethereum 2.0 contract has exceeded 9 million ethereum or more than $28 billion using today’s exchange rates. The amount of ethereum locked into the contract has increased 22.29% since the first week of September 2021, when the contract held 7.4 million ether.

Ethereum 2.0 Contract Exceeds 9 Million Ether

While the proof-of-work (PoW) side of the Ethereum network has seen its hashrate tap all-time highs above 1 petahash per second (PH/s) this year, the transition to Ethereum 2.0 continues with ether being locked into the ETH 2.0 contract.

Essentially, to become a validator and stake ethereum, 32 ETH is required to join the pool of ETH 2.0 validators. When the ETH 2.0 contract first launched, Bitcoin.com News reported on Ethereum’s co-founder Vitalik Buterin contributing funds to the contract on November 6, 2020.

On January 17, 2022, etherscan.io data indicates that there’s approximately 9,057,890 ethereum worth over $28 billion (at the time of writing) in the ETH 2.0 contract. Data shows that the contract exceeded 9 million ether on January 16, 2022.

Year-to-date, ethereum’s price is up over 150% but during the last 30 days, ether has shed 18.5% and two-week stats indicate ether has lost 17.5% in value against the U.S. dollar. While Ethereum’s market cap dominance was 18-20% during the course of 2021, today ETH dominance is around 17.9%.

When Bitcoin.com News reported on the contract exceeding 7.4 million, ether was a bit more valuable as the stash was valued at $29.3 billion at the time. In addition to the 9 million ether locked into the ETH 2.0 contract, since the implementation of EIP-1559, 1,541,113 ethereum worth $5.8 billion (at the time of writing) has been burned.

Between the ETH 2.0 contract and the burned ethereum since the introduction of EIP-1559, the value equates to $33.8 billion in value at the time of writing.

What do you think about the 9 million ether locked into the Ethereum 2.0 contract? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.