Q3 2021 XRP Markets Report

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The third quarter of 2021 marked a pivotal period for the XRP ecosystem, characterized by accelerated innovation, expanding infrastructure, and growing real-world adoption. Ripple continues to champion transparency through its quarterly XRP Markets Report, offering insights into market dynamics, technological advancements, and strategic developments shaping the future of digital assets.

This report dives deep into key trends—from the rise of NFTs and decentralized finance (DeFi) to regulatory shifts and on-demand liquidity growth—while highlighting how XRP and the XRP Ledger (XRPL) are evolving in response.

Crypto Market Overview: NFTs, ETH Killers, and Market Recovery

Q3 2021 was defined by the explosive growth of non-fungible tokens (NFTs), with Ethereum remaining the dominant platform for minting and trading. Marketplaces like OpenSea regularly recorded daily trading volumes exceeding $100 million, while high-profile collections such as CryptoPunks and Bored Ape Yacht Club attracted mainstream attention and auctions at Sotheby’s.

Despite Ethereum’s leadership, rising gas fees—averaging $17.81 per transaction—spurred migration to alternative blockchains. By the end of Q3, Ethereum’s share of total value locked (TVL) across all chains had dropped from 97% at the start of the year to 69%. Networks like Solana, Avalanche, and Terra emerged as so-called “ETH killers,” launching billion-dollar incentive funds to attract developers and users.

Meanwhile, the XRP Ledger capitalized on its low-cost, high-speed infrastructure by welcoming new NFT projects such as xPunks, Aesthetes, and Bored Apes Club XRPL. These launches underscored XRPL’s growing appeal for creators seeking scalable and sustainable blockchain solutions.

👉 Discover how blockchain innovation is reshaping digital ownership and financial infrastructure.

The broader crypto market also rebounded from regulatory turbulence earlier in the year. Following China’s mining crackdown, Bitcoin’s hashrate bottomed in early July before surging over 60% by quarter-end as operations resumed in Kazakhstan and the U.S., correlating with a recovery in BTC prices.

Regulatory Landscape: Clarity Amidst Scrutiny

Regulatory oversight intensified during Q3, with SEC Chair Gary Gensler describing the crypto industry as operating in a “Wild West” environment. While he asserted that regulatory frameworks already exist, many stakeholders—including SEC commissioners and lawmakers—argued that clear rules are still lacking, especially under a policy of enforcement-first regulation.

Stablecoins remained a focal point, drawing scrutiny over reserve transparency and rapid market cap expansion.

Update on the SEC Lawsuit Against Ripple

A major milestone was reached in August when the fact discovery phase in the SEC vs. Ripple lawsuit concluded. The case has now entered expert discovery, where both parties submit expert reports on relevant legal and financial matters. The court has set a deadline of mid-January 2022 for this phase to end.

Ripple remains committed to expediting the legal process and achieving a resolution that affirms XRP’s status as a currency rather than a security. The outcome could set a critical precedent for digital asset regulation in the U.S.

Unprecedented Growth in On-Demand Liquidity (ODL)

One of the standout developments in Q3 was the record growth of Ripple’s On-Demand Liquidity (ODL) solution. Leveraging XRP for cross-border payments, ODL eliminates the need for pre-funded accounts, reduces operational costs, and unlocks working capital for financial institutions globally.

Transaction volume across RippleNet more than doubled year-over-year, with ODL transactions increasing by 130% quarter-over-quarter. In Q3, ODL accounted for approximately 25% of total RippleNet volume—driven largely by legacy clients like SBI Remit transitioning from fiat-only payments to ODL-enabled flows.

Customers can now use ODL to send payments to over 20 countries via exchanges or directly through crypto wallets. This flexibility enhances user experience and streamlines international transfers.

👉 Learn how next-generation payment solutions are transforming global remittances.

Responsible XRP Management: Sales, Escrow & Leases

Ripple maintained its disciplined approach to XRP distribution during Q3:

Escrow activity remained consistent: 3 billion XRP were released (1 billion monthly), with 2.6 billion returned to new escrow contracts.

Additionally, Ripple clarified that certain wallets used for market operations also engage in short-term XRP leases to market makers—totaling 48.3 million XRP in Q3. These leases are temporary and returned to Ripple, distinguishing them from permanent sales often misinterpreted by traders.

Expanding Market Infrastructure & DeFi Integration

XRP’s derivatives footprint grew significantly in Q3:

In DeFi, the XRP Ledger’s native decentralized exchange (DEX) continued to serve as a foundational layer. Third-party platforms like XUMM, Sologenic, and GateHub enable direct interaction with the XRPL DEX, empowering users with non-custodial trading.

Beyond the XRPL, wrapped XRP (XRPB) is available on Kava.io—a DeFi platform with nearly $400 million in TVL—supporting lending, borrowing, and swapping.

Looking ahead, the Flare Network’s testnet Songbird launched in September, paving the way for Flare.Finance—an institutional-grade DeFi platform that will bring smart contract capabilities to XRP holders.

Efforts are also underway to bridge XRP to Ethereum, enabling interoperability between high-throughput payment rails and mature smart contract ecosystems.

Fueling Innovation: Creator Fund & CBDC Partnerships

$250M Creator Fund Launch

In September, Ripple unveiled a $250 million Creator Fund to support artists, brands, and marketplaces building NFTs on the XRP Ledger. The fund provides financial backing, technical resources, and creative guidance—leveraging XRPL’s speed, low cost, and environmental sustainability.

Ripple has partnered with NFT platforms and creative agencies to deliver seamless tools for developers and creators alike.

Central Bank Digital Currency (CBDC) Collaboration

Ripple announced a landmark partnership with the Royal Monetary Authority of Bhutan to pilot a CBDC using Ripple’s technology. This initiative supports Bhutan’s goals of enhancing financial inclusion, improving cross-border payments, and reinforcing its status as the world’s only carbon-negative nation.

Developer Ecosystem Momentum

The XRP Ledger recorded strong on-chain activity in Q3:

Hundreds of projects are now building on XRPL across diverse use cases:

Federated Sidechains: Unlocking New Capabilities

RippleX released a developer preview of Federated Sidechains, enabling developers to create custom blockchains anchored to the XRPL. This innovation allows for:

Key milestones ahead:

XRPL Grants Program

The first two waves of the XRPL Grants Program awarded nearly $2 million to developers worldwide. Backed by RippleX and community partners like XRPL Labs, the initiative supports innovation in NFTs, tokenization, and sidechain development—accelerating the vision of an open, interoperable Internet of Value.

Frequently Asked Questions (FAQ)

Q: What is On-Demand Liquidity (ODL), and how does it use XRP?
A: ODL is a cross-border payment solution that uses XRP as a bridge currency to eliminate pre-funding requirements. It enables instant settlements by converting fiat to XRP and then to the target fiat currency—all within seconds.

Q: Did Ripple sell large amounts of XRP in Q3 2021?
A: Ripple reported net sales of $491.74 million in Q3, all tied to ODL adoption. These sales represented just 0.26% of total global XRP trading volume during the period.

Q: Is XRP involved in DeFi and NFTs?
A: Yes. The XRP Ledger hosts its own DEX and supports NFT projects like xPunks and Aesthetes. Additionally, through platforms like Kava.io and upcoming solutions on Flare Network, XRP is expanding into lending, borrowing, and smart contract-based applications.

Q: What are Federated Sidechains?
A: Federated Sidechains allow developers to build custom blockchains connected to the XRPL. They enable new features like smart contracts without altering the main ledger, supporting faster innovation and deployment.

Q: How does Ripple ensure responsible XRP distribution?
A: Ripple uses a transparent escrow system releasing 1 billion XRP per month. Unused funds are returned to escrow. The company avoids programmatic sales and only sells XRP to support ODL adoption.

Q: What impact does the Bhutan CBDC partnership have?
A: This pilot demonstrates how blockchain technology can support financial inclusion and sustainable development—especially in emerging economies—by modernizing national payment systems with secure, efficient digital currencies.

Core Keywords: XRP Ledger, On-Demand Liquidity (ODL), Federated Sidechains, XRPL DeFi, NFTs on XRPL, Ripple CBDC, XRP escrow