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Software developer and seasoned $XRP Ledger ecosystem enthusiast Wo Jake shared his thoughts on the most important challenges for XRPL in terms of making its $XRP tokenomics reasonable, inclusive and democratic. He proposed three ideas on how to make participating in the XRPL consensus more attractive for retail users.
Technically competitive, but economically terrible: What's wrong with $XRP Ledger?
When it comes to monetary incentives, $XRP Ledger still lacks viable reward mechanisms and adheres to a poor and unfair model of network. As such, it underperforms in this regard compared to mainstream EVM ecosystem blockchains, Jake admits in his recent Twitter thread.
[#XRPL & $XRP: A thread on incentive models🧵]
— Wo Jake 🪝 (@woj4ke) July 8, 2023
Incentive models has been on my mind for quite some time, actually
I really think and know that the XRPL is a wonderful payments solution but with Hooks & Evernode, this will all change. (!)
Let's take a look and have a talk
1/7 https://t.co/E27wUIaCTK
This status quo is dangerous for real-world adoption of $XRP Ledger and $XRP-based solutions, he added. Meanwhile, representatives of the banking segment are aware of the technical competitiveness of both the network and its core asset.
For Jake, introduction of a non-network-securing incentive model to $XRP Ledger looks like a viable solution to some of the aforementioned challenges. He started a discussion, and over 50% of his followers agreed that XRPL needs incentive mechanisms.
To start with, Jake recommended to focus on three elements of $XRP Ledger: Hooks, balances and periodical lockups. For instance, the creator of this or that Hook can be rewarded once someone uses this hook and destroys $XRP gas using this Hook.
Also, users of the $XRP cryptocurrency can be rewarded for holding tokens during a predetermined period of time.
Can Hooks change game in $XRP tokenomics?
Last but not least, the lockup instruments should be able to distribute $XRP rewards for locking $XRP in on-chain liquidity mechanisms.
As such, the tokenomics of $XRP Ledger can have a boost once the Hooks amendment is live. As covered by U.Today previously, the Hooks activation is designed to enhance XRPL tooling with basic smart contract functionality.
A month ago, on June 6, 2023, the Hooks amendment successfully passed a third-party security audit by the U.S.-based vendor FYEO.