XRP
Is Not Decentralized, Claims Founder
Of Europe s Oldest
Crypto Fund
XRP Is Not Decentralized, Claims Founder Of Europe s
Oldest Crypto Fund
by Jake Simmons
3 minutes ago
in XRP
0
In a post on X, Justin Bons, Founder and Chief Investment Officer of Cyber
Capital—Europe s oldest cryptocurrency• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта fund—asserts that the XRP Ledger
(XRPL) is centralized and permissioned, contradicting claims made by Ripple
executives. Bons also accuses the XRP Foundation of misleading investors about
the network s decentralization and exerting total control over it.
Here s Why XRP Is Centralized
Ripple is centralized & permissioned, contrary to the claims made
by its executives. XRP is misleading investors by lying about its
decentralization. The foundation has total control over the network!
Attracting retail buyers with such false claims is straight-up fraud!
Bons declares.
Central to Bons s argument is the assertion that the consensus mechanism
relies on Unique Node Lists (UNLs), which are centralized lists of trusted
nodes issued by single entities, including the XRP Foundation. He explained
that this setup aligns more with a Proof of Authority (PoA) system rather than
decentralized consensus mechanisms like Proof of Stake• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта (PoS) or Proof of Work• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта
(PoW) . XRPs consensus is based on UNLs [ ] XRP is not based on
PoS or PoW, but PoA (Proof of Authority). Yet they claim to be more
decentralized than BTC & ETH, he notes.
Related Reading: Spot XRP ETF Race Heats Up As WisdomTree Files S-1
Application With SEC
Bons emphasizes that while users can modify their own UNLs and choose whom to
trust, this does not equate to a trustless system—a fundamental characteristic
of truly decentralized cryptocurrencies• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта. The nuance in the language
here is subtle but immensely important. Truly decentralized cryptocurrencies• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта
are trustless , in that ZERO trust is required.
Choosing who to trust is not the same as trustlessness! he argues.
He further points out that if there is insufficient overlap between a
user s UNL and the rest of the network—a 90% overlap is required to
prevent forking—the user risks being disconnected. If there is
insufficient overlap between your UNL & the rest of the network; you will
get kicked off! According to their own docs; a 90% overlap is required to
prevent forking; resistance is futile! Bons states.
Bons contends that, in practice, direct permission from the XRP Foundation is
necessary to participate in consensus. This means that in practice;
Direct permission is required from the XRP foundation to participate in
consensus. That is about as centralized as it gets when it comes to blockchain
design, he adds.
Delving deeper, Bons noted that for a long time, there was only one UNL—the
default UNL (dUNL)—which is hosted by the foundation and hardcoded as default.
We have determined that UNLs are trusted third parties ultimately
chosen by the XRP foundation. This is reinforced as we dig deeper into these
UNLs: For the longest time, there was only one UNL; the dUNL, which is hosted
by the foundation, the dUNL is hardcoded as default, he explains.
He criticizes the dynamic nature of these validator lists, which are based on
a web address hosted by the XRP Foundation. This means they can
instantaneously change the validator list without a moment s notice in a
totally centralized fashion! Kicking out anyone who goes against the
authority, Bons claims.
Bons highlighted that over time, two more official UNL lists
were added—though one, Coil, has since ceased operations —leaving the dUNL and
the XRPLF lists, both directly funded by the XRP Foundation. This adds
another layer of de facto control over the network, he says.
Related Reading: Dogecoin Price To $3 And XRP Price To $5? Analyst Says It’s
‘A Matter Of Time’
He argues that the lack of incentives, such as block rewards found in PoW or
PoS systems, means disparate parties cannot coordinate effectively without
trust. Blockchains allow for disparate parties who do not trust each
other to coordinate. All thanks to the underlying incentive mechanism (PoS or
PoW)—yet, XRP has no block reward & no incentives; it is purely based on
trust, he explains.
Bons asserted that new UNLs cannot coordinate with each other due to the
absence of these incentive mechanisms, resulting in the foundation having de
facto total control. Since if new UNLs cannot coordinate, it means the
foundation has de facto total control. Control over validators equals control
over the network! Giving permission to universities & companies to run
nodes is precisely what a permissioned blockchain federation looks
like! he declares.
He further reveals that all the UNLs are actually identical, containing the
same validator sets. On closer inspection, all of the UNLs are actually
identical to each other! With the same validator sets! Further proving that
the foundation in practice has total control over the network! Bons
states.
This proves that new UNLs cannot coordinate with each other! Thereby,
forcing the foundation s list to become the de facto list. As all UNLs
have to comply or risk getting forked off! he added.
Bons expresses concern that this level of control allows the foundation to
carry out censorship if compelled to do so. This also allows the
foundation to carry out censorship if it were compelled to do so. As they have
such a high degree of control! This is very different from how
cryptocurrencies• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта are supposed to work! Explaining why it only takes 20% of
validators to halt the network. he warns.
He also points out that there are no rewards for running a trusted validator,
unlike in PoW or PoS models where validators are incentivized. There
are also no rewards for running a trusted validator. Unlike PoW or PoS, where
the cost of attack mirrors block reward to miners/stakers. This is why the
measure of decentralization is highly related to this reward. Over XRP, this
measure of decentralization is zero! he asserts.
Reflecting on his history, Bons said, I have researched XRP since the
early days. I distinctly remember the trade-off in decentralization was
recognized. This has gradually shifted as the community & leadership
became more extreme in their claims. I do not say this to belittle investors
but to empower them!
He highlights the coin s initial distribution, noting a shocking
pre-mine of 99.8%, which he described as one of the most unfair
distributions of all time. Bons emphasized that since no new coins are
created, all new circulating XRP is bought from the founders. This
makes it one of the most unfair distributions of all time. As no new XRP is
created, all new circulating XRP is bought from the founders! he
states.
Bons proposed that the solution lies in adding a Proof of Stake• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта mechanism to
replace the UNL system, thereby transforming XRP into a more conventional
decentralized blockchain. Pretending XRP is permissionless is not the
right answer. The real solution lies in adding PoS to replace the UNL list!
Transforming XRP into a more conventional decentralized blockchain, he
suggests.
He concluded his thread with a call to action for the community: If you
truly care about XRP, take this very seriously. As within this critique lie
solutions that can help XRP succeed; Either through honest centralization or
decentralization. As the truth sets us free; leave or apply pressure for
change; as nothing is beyond redemption.
Reactions from the community were swift and filled with indignation. Panos
Mekras, Co-founder of Anodos Finance, responded via X: You are just
embarrassing yourself publicly. Ripple is a private company, XRP exists before
Ripple, the XRP Ledger is decentralized with hundreds of validators and nodes
all over the world, >80% validator agreement is needed for control and no
validator has more than 2% control. These are the facts. You either accept it
or you are a delusional hater. Don t be a flat-earther.
Another community member, known as Krippenreiter (@krippenreiter), commented:
Ripple is a company my dear friend. Try again. Ripple Labs or
its founders have not yet commented.
At press time, XRP traded at $2.55. XRP price, 1-week chart | Source: XRPUSDT
on TradingView.com
Featured image created with DALL.E, chart from TradingView.com
