After the recent listing of 0x Project to Coinbase Pro, many investors are looking out for the next project which is going to be listed. The third largest cryptocurrency by market cap, Ripple’s XRP, has long been anticipated by investors to be worthy of a listing. The listing has never materialized, but there is renewed optimism for investors after the listing of 0x Project. This has been reflected in the XRP price. On the day of the official announcement that 0x Project would be listed, XRP began appreciating from a low of $0.29 up to trading around $0.44 where its current price is.
Coinbase Pro currently has six assets listed. These are Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ethereum Classic, and 0x Project. With 0x Project ranked 25th in terms of total market cap and Ethereum Classic ranked 16th, why did these get listed while XRP remains unlisted?
The Digital Asset Framework
The framework matches assets up against six key areas:
- Coinbases Missions and Values
- The Technology
- Legal and Compliance
- Market Supply
- Market Demand
- Crypto Economics
How Does XRP Match Up?
XRP matches up extremely well with some of these criteria but is far off when it comes to others.
In terms of market supply and demand, XRP is a perfect match. The asset is extremely liquid, is listed on almost every exchange, and has huge interest from the community. There are also a number of developers building projects on top of the XRP blockchain. The technology XRP uses is also extremely fast and scalable. The team is well capable and consists of high-level professionals with significant experience.
When it comes to the other key areas, XRP does not match up as well. The Coinbase missions and values place emphasis on decentralization, economic freedom, equality of opportunity, and innovation.
Being the first cryptocurrency to focus on business solutions to remittance payments, XRP is innovative, but its level of decentralization is highly questionable. The other assets listed on Coinbase Pro use proof-of-work (POW) to achieve consensus whereas XRP has its own Ripple Protocol Consensus Algorithm (RPCA). RPCA is a far different system from POW and Coinbase may very well consider that it is not decentralized.
On top of this, Ripple owns over 55% of the total XRP in existence. This goes against a number of criteria that Coinbase which include both Coinbase’s values and their crypto economics considerations. It does not provide equality of opportunity with a large number of the supply being held by a small number of wallets (81% of the total tokens are held by the top 100 XRP wallets).
XRP is also developed to be a business solution for business users. The rest of the assets which have been listed to Coinbase Pro are developed to be easily accessible to anybody who wants to participate. Coinbase Pro have described Economic Freedom, one of their values, as follows:
“A measure of how easy it is for members of a society to participate in the economy. The technology enables individuals to have more control over their own wealth and property, or the freedom to consume, produce, invest, or work as they choose.”
There are also questions over XRP’s legal status with many speculating that down the line it may be considered a security. Coinbase would simply not want to expose themselves to such a risk and have stated so in their Legal and Compliance criteria in the framework.
While the anticipation from investors for XRP being listed to Coinbase Pro is unlikely to go away, the chances of an actual listing appear slim when Coinbases criteria are matched up to XRP.