XRP Ledger reduced base reserve requirements from 10 XRP ($25.60 at current XRP prices) to just 1 XRP ($2.56) on Dec. 2, blockchain data shows. This allows new network users to fund their wallets with a smaller amount of cryptocurrency, potentially reducing a barrier to adoption. It also allows users to spend some XRP they have otherwise had to hold in reserve.

XRP Ledger reduces base reserve requirements

The reserve change occurred at 10:45 pm UTC. It was announced on X by the pseudonymous XRP ( XRP ) validator operator V

XRP cuts reserve requirement by 90%, allowing for smaller new wallets image 0

Source: VET

The owner reserve has also been reduced from 2 XRP ($5.12) to 0.2 XRP ($0.51). This means that users only need to keep 0.2 XRP per object held in their accounts. According to XRP Ledger documents, objects can include non-fungible tokens (NFTs), trust lines, signer lists or owner directories. Some oracles also count as objects and require an owner reserve.

The purpose of the reserve was to prevent the size of the ledger from increasing beyond the ability of nodes to store it. Developers wanted to prevent spam accounts from being created that had little to no XRP in them. So, they created the 10 XRP reserve requirement to prevent this. However, the high reserve has been criticized by some developers who say that it has slowed down the adoption of the network.

Developers weigh pros and cons of lower reserves

On Oct. 16, XRP Ledger developer WietseWind announced that all nodes owned by the XRPL Labs development team had become configured to process a lower reserve requirement, allowing them to vote for the change.

In the post, WietseWind acknowledged some drawbacks to a lower reserve requirement. “The number one concern would be increased activity on the ledger to the point where it becomes a challenge for infrastructure,” they said. Still, he said this was “a good problem to have” beca it could only occur if there were more users and activity. They said engineers could handle the added stress on the network and would find ways to accommodate it.

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Although the change was implemented on XRPL Labs nodes on Oct. 16, changing the reserve requirement necessitated both a validator reset and a vote from all validators, which was not implemented until Dec. 2.

Election optimism and SEC battle boosts XRP

The change comes at a time when the XRP Ledger native coin has been rising rapidly. Before Donald Trump’s election as United States president, XRP was worth less than a penny per coin. Since the election it has risen to $2.65 , its highest level since February 2018. 

XRP’s founding development team, Ripple Labs, has been battling the US Securities and Exchange Commission for years. The SEC claims that XRP is legally a security and should have been registered with the SEC, while Ripple claims it is not. Ripple has been fined $125 million in the lawsuit and has appealed the ruling.

Related: Ripple files Form C, appeals SEC ruling on XRP institutional sales