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 Supply-side fees Methodology

## 1. Overview

Supply-side fees measures the portion of total fees that flows to service providers on XRP Ledger. The metric distinguishes between two fee types: L1 transaction fees paid for ledger operations, which are burned entirely and generate zero supply-side fees, and XRPL AMM trading fees paid by swappers, which accrue entirely to liquidity providers. Supply-side fees are denominated in USD.

## 2. Data sources

- **Blockchain events**: Reserve state changes from XRPL AMM pools on XRP Ledger, captured from affected nodes where ledger entry type is XRPL AMM and transaction types include `Payment` and `OfferCreate`
- **XRPL AMM fee configuration**: `AMMCreate` and `AMMVote` transaction types from affected nodes, used to determine the trading fee percentage for each pool
- **External data**: End-of-day price feeds for XRP and XRPL AMM pool assets

## 3. Step-by-step calculation

### Component A: L1 transaction fee allocation

- **Purpose**: Determine supply-side allocation for base layer transaction fees
- **Logic**: All L1 transaction fees on XRP Ledger are burned and destroyed, meaning zero value flows to validators or other service providers. Supply-side fees for L1 transactions are hardcoded to zero regardless of transaction volume or fee amounts charged.

### Component B: XRPL AMM trading volume inference

- **Purpose**: Calculate swap volumes from reserve state changes to derive trading fees
- **Logic**: Reserve deltas are calculated using a lag window function partitioned by pool address and ordered by block timestamp and transaction index. Only `Payment` and `OfferCreate` transaction types are included, as these represent swap paths through XRPL AMM pools. The absolute value of reserve changes on both sides of the pool captures the swap size. Pools from the denylist are excluded to filter out pools with pricing anomalies.

### Component C: XRPL AMM fee extraction and allocation

- **Purpose**: Apply pool-specific trading fee rates and allocate to liquidity providers
- **Logic**: Trading fee percentages are extracted from `AMMCreate` and `AMMVote` transactions, parsed from the `TradingFee` field in affected nodes. Fee rates use units of 1/100,000 where a value of 1,000 represents 1%. For each swap, the smaller of the two reserve deltas is multiplied by the corresponding asset price to determine USD volume, then multiplied by the trading fee rate to calculate fees. These fees accrue entirely to liquidity providers, so supply-side fees equal 100% of XRPL AMM trading fees. Amounts are normalized by decimal precision and aggregated daily with UTC day boundaries.

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

Portion of fees distributed to service providers or supply-side participants.

XRP LedgerXRP

Supply-side fees

Supply-side fees

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