Recently, experts analyzed the connection between XRP's technical capabilities and its long-term price projections. The research delves into key concepts such as TPS and annual velocity.
Current XRP Capabilities and Their Impact on Annual Velocity
According to expert Future XRP, the XRP Ledger can handle 1,500 transactions per second (TPS) under real-world conditions. In stress-testing environments, this number can exceed 3,400 TPS. With potential improvements like validator optimization, XRP could scale to 10,000 TPS or more. TPS directly affects the annual velocity of the token, which determines how many times the token is used within a year.
XRP Circulating Supply vs Total Supply
While the total supply of XRP is capped at 100 billion tokens, the effective circulating supply could be much lower. A significant share of XRP is expected to remain in cold storage, reserved in ETFs, or allocated for long-term staking. Depending on the scenario, the liquid supply could be between 10 and 60 billion XRP. At 10,000 TPS, XRP could handle approximately 315.36 billion transactions per year, reflecting various velocity rates based on circulating supply.
Assessing XRP’s Role in Global Settlements
Future XRP asserts that the realistic annual settlement volume for XRP ranges from $500 trillion to $1 quadrillion. These figures reflect established financial systems, including cross-border payments and currency markets. To analyze further, the MV = PQ formula is used, linking XRP’s technical utility with its price.
Future XRP concludes that XRP's potential valuation is contingent upon its practical use in global financial infrastructure. Based on calculations and supply dynamics, the analysis indicates that XRP could see significant price increases if it fulfills a role in global settlements.
