Through the use of blockchain and modern APIs, Ripple enables financial institutions who are part of the network, RippleNet, to send money globally, instantly, reliably and for fractions of a penny. RippleNet is built on top of Ripple’s consensus ledger, XRP Ledger (XRPL).

Ripple is the leading provider of crypto-enabled solutions for businesses. Ripple was founded by Chris Larsen and Jed McCaleb and launched in 2012 (previously OpenCoin).

XRP tokenholders own and govern Ripple's consensus ledger 'XRP Ledger' (XRPL). Ripple's investors include a16z, Pantera Capital, Route 66 Ventures, etc.

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XRP Ledger

# XRP Ledger Fees Methodology

## 1. Overview

Fees measures the total value paid by users to transact on XRP Ledger and to trade on the XRPL AMM. This metric combines two fee streams: base transaction fees paid in XRP for all ledger operations, and trading fees generated from automated market maker swaps. Trading fees are paid in the traded assets and flow to liquidity providers. Fees are converted to USD for aggregation.

## 2. Data sources

- **Blockchain data**: Transaction fee records covering the XRP Ledger mainnet, plus XRPL AMM reserve state changes and fee configuration events from XRPL AMM pools
- **External data**: End-of-day price feeds for XRP and traded assets

## 3. Step-by-step calculation

### Component A: Base transaction fee collection

- **Purpose**: Capture fees paid for all ledger transactions
- **Logic**: Transaction fee amounts are extracted from ledger records, normalized from drops to XRP by dividing by 1,000,000, and aggregated daily. All transaction types are included regardless of success status.
- **Key fields**: `fee_charged` representing the XRP fee amount in drops

### Component B: XRPL AMM trading volume calculation

- **Purpose**: Infer swap volumes from XRPL AMM reserve state changes
- **Logic**: Reserve balances are tracked for each pool across all transactions. For swap transactions (identified as `Payment` and `OfferCreate` transaction types), the absolute change in each reserve between consecutive states is calculated. The lag function spans all transaction types so that reserve changes from liquidity operations are excluded from swap deltas. Pools in the denylist are filtered out to exclude pairs with extreme price imbalances or one-sided liquidity.
- **Key fields**: `reserve_0` and `reserve_1` representing pool asset balances, `transaction_type` for swap identification

### Component C: XRPL AMM fee rate extraction

- **Purpose**: Determine the applicable trading fee percentage for each swap
- **Logic**: Fee rates are parsed from `AMMCreate` and `AMMVote` transactions where the ledger entry type is XRPL AMM and the transaction result is successful. The `TradingFee` field is extracted from affected node metadata. Fee rates are tracked with validity windows, where each rate applies from its vote timestamp until the next vote or indefinitely. For each swap, the most recent fee rate active at the swap timestamp is joined.
- **Key fields**: `TradingFee` representing the fee rate in units of 1/100,000 (value 1000 equals 1%)

### Component D: USD conversion and fee calculation

- **Purpose**: Normalize transaction fees and calculate XRPL AMM trading fees in USD
- **Logic**: For base transaction fees, XRP amounts are multiplied by end-of-day XRP prices. For XRPL AMM fees, swap volumes are first converted to USD by multiplying delta amounts by their respective asset prices and taking the lesser of the two sides. Trading fees are then calculated as `volume_usd * trading_fee / 100000`. Results are aggregated daily with UTC day boundaries.

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Total value users pay to use a protocol (gross fees, user-paid fees).

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