Crypto researcher SMQKE has released a follow-up tweet further elaborating on his assertion that XRP holders “own a slice of Ripple’s future cashflows.”

In this latest post, SMQKE provides a structured analogy comparing XRP and its utility within the Ripple ecosystem to the dynamics of a pharmaceutical startup and a drug patent.

Crypto researcher SMQKE has shared a follow-up tweet further elaborating on his assertion that XRP holders “own a slice of Ripple’s future cashflows.”

In this latest post, SMQKE provides a structured analogy comparing XRP and its utility within the Ripple ecosystem to the dynamics of a pharmaceutical startup and a drug patent. The explanation offers a conceptual framework for understanding XRP’s value proposition without conflating the token with equity or security instruments.

Earlier this week, SMQKE sparked discussion with a tweet highlighting an excerpt from a 2025 academic text, The Future of Crypto Regulation. The document states, “What XRP entitles the holder to is the token itself, which is integral to executing transactions on the Ripple settlement network,” and further explains that “XRP should increase in value, as the full functionality of the system requires the token.”

At the end of the day, XRP purchasers have bought, effectively, a SLICE OF THE FUTURE CASHFLOWS that Ripple would make from the licensing of its transaction settlement system.

Of course it’s PHrased interestingly- they go on to say “the claim that XRP purchasers are buying a slice of future cashflows is not quite accurate.”

But they continue: “XRP is a token that is used to facilitate transactions on the Ripple network, and its value is dependent on the success of the network.”

The Drug Patent Analogy

Building on this foundational logic, SMQKE’s new tweet emphasizes that XRP’s value is intrinsically tied to the success and continued development of Ripple’s software layer, Ripplenet.

“Buying XRP is like buying a share in a drug patent. Neither the patent nor the technology behind it is a security, but both have value that depends on the success of the company that makes and promotes the drug, which in this case is like buying a share in the company that developed the blockchain technology,” he says.

In this analogy, Ripple is the pharmaceutical startup, XRP is the drug patent, and Ripplenet software is the drug itself or its applications. XRP holders, he adds, are similar to those who invest in the patent, not in the hope of receiving dividends but because the value of their investment is contingent upon the broader system gaining traction. Blockchain technology, he explains, is the infrastructure that allows these interests to be held and exchanged.

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Supporting Documentation from Legal Scholarship

The excerpt from the legal academic article that SMQKE references in his post provides further context for his analogy. It explicitly mentions that XRP is “integral to executing transactions on the Ripple settlement network” and its value may rise proportionally with the system’s adoption.

Moreover, the text states that “the XRP token embodies, in effect, a licensing right for the Ripple transactional system.” This interpretation positions XRP as an operational necessity rather than a speculative asset disconnected from utility.

Clarifying XRP’s Distinction from Traditional Securities

In a previous post, SMQKE clarifies that XRP does not represent an equity stake in Ripple, nor does it provide entitlement to dividends or ownership in the company. However, its utility within the transaction system makes it a critical component of Ripple’s business model. In essence, the token’s worth is inherently linked to the operational success of the network it powers.

This documented analogy provides an interpretive tool for those seeking clarity on XRP’s economic structure. While XRP is not a traditional security, its functional necessity to the Ripple ecosystem and its potential to appreciate due to that necessity position it as a unique digital asset within the crypto landscape.