Overview of the Two-Tier Staking Proposal
Ripple’s Chief Technology Officer, David Schwartz, has recently unveiled a significant proposal designed to overhaul the XRP Ledger (XRPL) through the introduction of a two-tier staking system. This model aims to deliver staking rewards to participants while actively addressing the risk of centralization, a key issue tied to proof-of-stake systems.
Concerns and Schwartz’s Governance Recommendations
The discussion about staking surfaced publicly on November 19, when Schwartz responded to longstanding fears regarding Ripple’s potential overreach, owing to its large XRP reserves. He suggested granting validators direct control over staked funds, instituting slashing only in cases of severe misconduct. Yet, Schwartz recognized that this might push validators to accept stakes mainly from trusted sources, paradoxically leading to more centralization rather than less.
Introduction of a New Governance Token
To counteract such tendencies, Schwartz proposed a two-layer governance framework, centered on a new governance token deliberately engineered to be “worthless.” This token would be administered by the collective token holders, ultimately replacing the current Unique Node List (UNL) system with a more decentralized, self-governing structure. Should the governance framework be misused, a “fork by governance” option would allow participants to create a new governance token and switch their server alignments, an idea Schwartz compared to nuclear deterrence: its true value lies in the threat of use, not in the act itself, particularly amid the presence of non-forkable assets like stablecoins.
Community Response and Technical Debate
The proposal has stimulated vigorous debate within the XRPL ecosystem. Skeptics have described XRPL staking as a “bizarre idea,” warning that combining a deflationary fee structure with validator rewards could revive friction between users and validators. Others noted that existing amendment votes primarily concern network upgrade timing, and pointed out that nodes can independently choose their software versions.
XRP Market Dynamics Amid Governance Proposals
Meanwhile, XRP itself has continued to experience marked market fluctuations. As of November 19, 2025, XRP trades at roughly $2.14, representing a modest dip from the prior close. Daily price swings have ranged between a high of $2.24 and a low of $2.13. These shifts come despite landmark developments, like the debut of the United States’ first spot XRP ETFs. Canary Capital’s XRPC fund began trading recently, drawing significant investments, with forthcoming entries by Franklin Templeton and Bitwise expected to further impact the market.
Bottom Line
The unveiling of a two-tier staking model by Ripple’s CTO could mark a foundational change for the XRPL, as it seeks to reconcile lucrative staking incentives with the foundational principle of decentralization. The crypto community’s continued scrutiny and discussion will shape the future trajectory of network security, governance, and market dynamics.
