Messari’s Protocol Research Analyst, Red Sheehan, recently released the “State of XRP Ledger Q2 2023” report, providing a detailed analysis of the XRP Ledger (XRPL) and its performance in the second quarter of 2023.

According to Sheehan, the XRPL, which has been operational for over a decade, offers fast, energy-efficient, cross-currency, and cross-border payments. Despite not supporting smart contracts, the XRPL can execute many functions similar to other networks, thanks to its native capabilities like Issued Currencies, a decentralized exchange (DEX), escrow functionality, and token management.

Sheehan reports that the native token on the XRPL, XRP, ranks as the sixth largest cryptocurrency by market capitalization at $24.8 billion. The XRPL averages around 15 transactions per second, with the potential to support up to 1,500. The cost of transactions on the XRPL is deterministic, with most transaction types costing ten drops, a unit of XRP.

However, the second quarter of 2023 saw a decline in XRPL’s network activity metrics, as outlined in Messari’s report. Average daily transactions fell by 11.9% from 1.32 million to 1.16 million, and daily active addresses decreased by 17.6% from 66,000 to 54,000. Despite this, the net number of accounts increased by approximately 30,000, driving total accounts up 0.7% to 4.68 million.

Sheehan also highlighted the unique feature of addresses on the XRPL, which can contain destination tags. This enables a single address to receive and track XRP deposits for multiple users, which can skew the number of daily active addresses downward. This is because one account, such as a centralized exchange, could be responsible for a large number of users.

Despite not natively supporting smart contracts, the XRPL hosts many features similar to programmable settlement networks like Ethereum, Cardano, and Solana, as per Sheehan’s analysis. It has a built-in central limit order book that processes all exchanges, including fungible tokens and NFTs. The XRPL also supports multiple assets through Issued Currencies, or IOUs, which are on-chain representations of various currencies, commodities, units, etc.