XRP Holders Have a Direct Interest in Ripple's Success

Crypto researcher SMQKE recently explained how XRP investors have an interest in Ripple's success by simply holding the token.

Crypto researcher SMQKE has explained how investors in the crypto token XRP have an interest in the success of the company Ripple, simply by holding the token.

The researcher, known on X (formerly Twitter) for his deep dives into crypto, began by noting a recent legal report by James C. Spindler for William & Mary Law School, America’s oldest law school, focusing on the regulatory implications of crypto.

The original report, released in May 2025, mentioned XRP as an economic proxy for Ripple’s future success. The company has always maintained that XRP is a utility token, not an investment contract. However, the report argued that XRP’s value is connected to the performance of Ripple’s payment network.

Interestingly, Ripple has also mentioned that its payments product, which can be used by clients such as banks, uses XRP in a way that does not impact the token’s price. Despite this, the report claimed XRP holders effectively gain exposure to Ripple’s future licensing revenue, even without holding equity or receiving dividends.

After uncovering the report in a previous post, SMQKE was later asked by a user how XRP holders could be interested in Ripple’s success. In response, he presented an analogy to help investors and enthusiasts better grasp the relationship between XRP holders and Ripple.

According to SMQKE, purchasing XRP is similar to buying a share in a drug patent from a pharmaceutical firm. While the patent itself is not a security and doesn’t promise payouts, its market value depends on the company behind it pushing forward with development and adoption.

"If the company flounders and the drug never gets approved, the patent becomes worthless despite being a valid piece of intellectual property," SMQKE added.

Likewise, he claims that Ripple depends on XRP to scale its payment infrastructure, and XRP holders have a direct stake in whether that system succeeds or fails.

"The company is reliant on it, much like a pharmaceutical company is dependent on its patent to generate revenue and value," said the researcher.

SMQVE added that XRP does not grant voting rights or legal claims over Ripple’s business, but it still places holders in a position where their fortunes rise and fall with the company’s progress. For context, investor sentiment around XRP has depended on Ripple’s developments over the years.

"In essence, XRP functions like the intellectual property behind Ripple's ecosystem, making those who hold it de facto backers of that system," said SMQKE.

In his analogy, Ripple is the pharmaceutical firm, XRP functions like the patent, and RippleNet (now part of Ripple Payments) is the real-world application.

When an XRP holder pointed out that RippleNet can operate without XRP, SMQKE referenced a 2020 study conducted by researchers from Imperial College London and University College London, highlighting the nearly 600,000 transactions that occurred daily on the XRP Ledger in 2019.

According to the study, XRP overwhelmingly dominated payment volume on the XRP Ledger, processing hundreds of millions of XRP daily. Notably, this usage shows how deeply integrated XRP is within Ripple’s infrastructure, even if the company allows clients the flexibility to bypass it.

He also highlighted an Atlantis Press report which claimed that as long as Ripple’s payment solutions remain widely adopted, XRP would continue to function as a central component in cross-border transactions.

However, it is important to note that Ripple itself has confirmed that its payments product can operate independently of XRP. Clients have the option to use XRP as a bridge currency, but they are not required to do so.