The second quarter of 2022 marked a period of significant turbulence and transformation across global crypto markets. Ripple’s Q2 2022 XRP Markets Report offers a transparent, data-driven overview of market dynamics, technological advancements on the XRP Ledger (XRPL), regulatory developments, and Ripple’s strategic initiatives. As a responsible stakeholder in the digital asset ecosystem, Ripple continues to prioritize open communication, innovation, and long-term utility.
This report covers key developments including native NFT support via XLS-20, expanding interoperability, regulatory shifts worldwide, progress in the SEC lawsuit, record growth in On-Demand Liquidity (ODL), and major ecosystem partnerships.
Crypto Market Overview: Navigating a Bear Market
Q2 2022 saw digital asset markets extend their downturn, shedding over $1 trillion in market capitalization. Macroeconomic headwinds—such as rising inflation, geopolitical instability from the war in Ukraine, and fears of an impending recession—triggered broad sell-offs across traditional and digital assets alike.
Notably, Bitcoin’s 30-day correlation with the S&P 500 reached an all-time high of 82%, according to Skew.com, signaling that crypto was increasingly moving in tandem with equities. This shift reflects growing institutional integration but also heightened sensitivity to macroeconomic sentiment.
The collapse of Terra’s UST stablecoin in May sparked a chain reaction across leveraged crypto platforms. This was followed by liquidity crises involving stETH, the insolvency of hedge fund Three Arrows Capital, and the suspension of withdrawals by crypto lender Celsius. These events exposed systemic risks tied to excessive leverage and opaque balance sheets.
Despite the turmoil, projects with real-world utility continued to gain traction. Companies like Magic Eden and Animoca Brands secured major funding rounds, underscoring investor confidence in long-term blockchain applications such as NFTs and metaverses.
👉 Discover how leading blockchain platforms are adapting to market shifts and driving innovation.
The XRP Ledger in the NFT Space
While the broader NFT market cooled alongside crypto prices, transaction volumes still exceeded $12 billion during the quarter. The XRPL emerged as a preferred platform for high-profile brands entering Web3 due to its scalability, low fees, and carbon-neutral consensus mechanism.
Balmain & Lotus: Luxury Brands Embrace XRPL
French fashion house Balmain partnered with mintNFT to launch its first fashion NFTs on the XRPL—marking a pivotal moment for luxury brands in blockchain. Similarly, British automotive icon Lotus teamed up with NFT PRO and Ripple to bring automotive NFTs to the ledger. This collaboration creates a new community merging car enthusiasts, collectors, and crypto adopters.
These partnerships highlight how the XRPL is becoming a go-to infrastructure for enterprises seeking sustainable, scalable entry points into the metaverse.
Creator Fund: Empowering Digital Artists
Ripple’s Creator Fund continues to support innovators building on the XRPL. Wave Two of the fund opened for submissions, offering technical guidance, financial backing, and co-marketing support to creators across gaming, art, entertainment, and social impact.
Notable recipients include:
- Zion Clark, elite athlete and documentary subject
- Jessica Ragzy, contemporary artist and LEGO Master
- Women Helping Women, an advocacy group combating gender-based violence
- Chef Cecy, digital artist behind PancakeSwap designs
These projects exemplify how NFTs can deliver both creative expression and tangible social value.
👉 Learn how artists and developers are leveraging blockchain to redefine digital ownership.
XLS-20: Native NFT Support on XRPL
One of the most anticipated upgrades in Q2 was Ripple’s activation vote for XLS-20, a proposed amendment that introduces native non-fungible token (NFT) functionality directly on the XRP Ledger.
Ripple upgraded its rippled servers to version 1.9.1 and configured its validators to support XLS-20 on Mainnet. Extensive performance testing confirmed that the ledger can handle increased transaction loads without compromising speed or stability.
Key Features of XLS-20:
- On-ledger NFT minting, trading, and burning
- Built-in royalty mechanisms
- Co-ownership capabilities
- No need for smart contracts
Unlike other blockchains where NFTs rely on complex smart contract logic, XLS-20 embeds NFT functionality at the protocol level—enhancing security, reducing costs, and improving user experience.
While Ripple supports the amendment, final activation depends on consensus among all XRPL validators—a testament to the network’s decentralized governance model.
Project Clio: Scaling XRPL Infrastructure
To meet growing demand, the XRP Ledger Foundation and Ripple launched Project Clio v1.0.0, an API server designed to scale access to XRPL data.
Clio enables developers to query ledger information efficiently without overloading core nodes. As more applications build on XRPL—especially in DeFi, payments, and NFTs—Clio ensures robust performance and reliability even under heavy usage.
This infrastructure upgrade is critical for sustaining long-term growth as user bases expand globally.
XRPL Interoperability Gains Momentum
Interoperability remained a key focus in Q2, with multiple cross-chain bridges enhancing connectivity between XRPL and other ecosystems.
Multichain Expands Bridging Services
Multichain deepened its integration with XRPL by partnering with Sologenic, Aesthetes, and OnXRP.com. These collaborations enable seamless asset transfers between blockchains, increasing liquidity and user choice.
onAVAX.com: First Cross-Chain DeFi Platform for XRPL & Avalanche
The launch of onAVAX.com introduced a new frontier for DeFi on XRPL. By bridging XRPL assets to Avalanche’s EVM-compatible chain, users can deploy XRP-based tokens in yield-generating protocols.
Additionally, Apex announced plans to build a bidirectional bridge between Avalanche and XRPL—set to launch in August 2022. The bridge will be accessible to all DEXs and DeFi protocols via open APIs, promoting widespread adoption.
FLUF World & The Root Network: A New Blockchain Ecosystem
A landmark announcement came when FLUF World revealed a partnership with Ripple to develop The Root Network, a new EVM-compatible blockchain integrated with XRPL.
Key highlights:
- XRP as gas token: All transactions on The Root Network will use XRP for fees
- Validator rewards: Node operators earn XRP for block production
- EVM support: Developers can deploy smart contracts using familiar Ethereum tooling
- Seamless interoperability: NFTs and tokens move freely between XRPL and The Root Network
With over 100,000 community members and more than 195,000 NFTs minted, FLUF brings substantial user momentum to the ecosystem—signaling strong adoption potential.
Global Regulatory Developments
Regulatory scrutiny intensified following market instability. Stablecoins came under particular focus as policymakers sought frameworks to mitigate systemic risk.
Regional Regulatory Actions:
- Japan: Passed a bill defining stablecoins as legal digital currency tied to the yen
- UK: Plans to regulate stablecoins under electronic payment laws
- U.S.: The Responsible Financial Innovation Act (RFIA) proposes full reserve backing for stablecoins and clearer jurisdictional roles between SEC and CFTC
- EU: Reached provisional agreement on AML rules requiring verification of unhosted wallets for transfers over $1,000
- Singapore: Issued in-principle approvals for digital payment licenses
- New York: Passed a two-year moratorium on certain crypto mining operations
Amid this landscape, concerns persist about “regulation by enforcement,” particularly regarding the SEC’s ongoing lawsuit against Ripple.
Update on SEC Lawsuit Against Ripple
On July 12, Judge Netburn denied the SEC’s claim of attorney-client privilege over drafts of former director William Hinman’s 2018 speech—a decision the SEC intends to appeal.
Hinman’s remarks previously suggested that Ethereum was not a security, creating expectations for regulatory clarity. However, the SEC’s inconsistent stance has fueled criticism that it is regulating through litigation rather than rulemaking.
Recent enforcement actions against individuals linked to Coinbase—without charging the company itself—have further highlighted this approach. Industry leaders argue that clear rules are needed to protect innovation and consumers alike.
Ripple remains committed to resolving the case swiftly and proving compliance with securities laws—a victory that would benefit not just Ripple but the entire U.S. crypto industry.
On-Demand Liquidity (ODL): Record Growth & Market Expansion
Ripple achieved record ODL volume in Q2—with over 9x year-over-year growth. The technology leverages XRP for real-time cross-border payments, reducing settlement times and eliminating pre-funded nostro accounts.
FINCI Partnership: Entering Lithuania
Ripple partnered with FINCI, a Lithuanian money transfer provider, enabling instant retail remittances and B2B payments between Europe and Mexico. This marks Ripple’s first customer in Lithuania and expands ODL’s footprint into new markets.
Treasury flows and bulk payments now represent a growing share of ODL usage—demonstrating expanding institutional adoption beyond individual remittances.
XRP Sales, Purchases & Escrow Activity
| Metric | Q1 2022 | Q2 2022 |
|---|---|---|
| Total ODL-related sales (millions) | $1,354.29 | $2,125.92 |
| Total purchases (millions) | $1,081.02 | $1,717.02 |
| Net sales (millions) | $273.27 | $408.90 |
| Net sales as % of total volume | 0.29% | 0.47% |
Ripple’s net sales accounted for just 0.47% of global XRP volume (CCTT), primarily driven by ODL adoption. Ripple also actively purchases XRP in the secondary market to support liquidity needs.
Escrow & Leases
- 3 billion XRP released from escrow (1B/month)
- 2.3 billion XRP returned to new escrow contracts
- 115.3 million XRP leased temporarily to market makers (not sales)
All figures align with Ripple’s established escrow framework designed to ensure predictable supply distribution.
Community Growth & Ecosystem Development
The XRPL processed 114.6 million transactions in Q2, with $58.3 billion in volume across 126.5 billion XRP transferred.
XRPL Grants Program: Wave 3 Success
- 36 new projects funded
- Over $3 million awarded
- 175+ applications from 30+ countries
- Categories: AI risk engines, e-commerce, geolocation mapping, tipping systems, NFTs
Judges included experts from Forte, Coil, Gatehub, and academic institutions under UBRI.
Wave 4 applications are expected to open in August 2022.
Spotlight: Peersyst & Colombian Land Registry
Peersyst Technology partnered with the Colombian government to digitize land registry rights using XRPL-based notarization software—streamlining property transactions and reducing fraud.
Ripple Commits $100M to Carbon Markets
Ripple pledged $100 million to accelerate carbon removal innovation and modernize carbon markets. Partnerships include Xange.com, which is building carbon credit verification and tokenization tools on XRPL using NFT standards.
Frequently Asked Questions (FAQ)
Q: What is XLS-20 and why does it matter?
A: XLS-20 is a proposed amendment that adds native NFT functionality to the XRP Ledger. It enables efficient minting, trading, and burning of NFTs without smart contracts—improving scalability and lowering costs.
Q: Did Ripple sell large amounts of XRP in Q2?
A: Ripple reported net sales of $408.9 million—just 0.47% of total global XRP trading volume—primarily tied to ODL usage. Ripple also purchased over $1.7 billion worth of XRP during the quarter.
Q: Is the SEC lawsuit affecting XRP's future?
A: While ongoing, many believe a favorable outcome would clarify regulatory treatment of digital assets in the U.S., benefiting the entire industry. Ripple maintains it did not violate securities laws.
Q: How is XRPL supporting sustainability?
A: The XRPL uses a carbon-neutral consensus algorithm. Ripple’s $100M commitment further supports climate fintechs tokenizing carbon credits as NFTs on the ledger.
Q: Can developers build DeFi apps on XRPL?
A: Yes—via bridges like onAVAX.com and tools like Project Clio. EVM compatibility through The Root Network will further expand DeFi possibilities.
Q: What happened to Jed McCaleb's XRP holdings?
A: Jed McCaleb sold his final XRP units from the “tacostand” wallet in July 2022—completing the distribution of one of the largest individual holdings since 2012.
Core Keywords:
XRP Ledger (XRPL), On-Demand Liquidity (ODL), XLS-20 amendment, NFTs on blockchain, crypto regulation 2025, cross-border payments with XRP, FLUF World Root Network