David Schwartz, Ripple’s CTO Emeritus, recently shared a definitive perspective on X regarding the connection between XRP’s market price and its functional utility.
“The higher the price, the better,” he stated. “A higher price would tend to mean liquidity is more cost-effective and slippage is less.”
Far from being a speculative remark, this explanation emerged directly from a discussion about how XRP operates as a bridge asset on the ledger.
The higher the price, the better. A higher price would tend to mean liquidity is more cost-effective and slippage is less.
— David 'JoelKatz' Schwartz (@JoelKatz) November 9, 2026
XRP’s Role on the Ledger
The exchange started when a community member expressed frustration regarding XRP’s price action. The user questioned why XRP had stagnated despite Ripple expanding its global footprint via RippleNet and its stablecoin, RLUSD.
Ripple leaders have faced mounting criticism recently as XRP’s valuation has failed to climb despite major milestones, such as the final approval of Ripple National Trust Bank. A central concern is that surging demand ought to have driven the price upward if the token was actively being used to transfer money across the ledger.
Schwartz responded by clarifying that XRP’s price is “largely dragged around by the market” and is only secondarily impacted by developments unique to XRP. While noting this was simply his assessment, he emphasized that it aligned with the available evidence.
Why Slippage Is Central to This
A subsequent inquiry from the same community member steered the discussion toward its most revealing insight, with the user asking whether a higher valuation is required for XRP to process large transaction volumes on the ledger without running into liquidity hurdles.
Schwartz verified that it is. His response connected XRP’s valuation straight to its efficiency as a payment instrument. Slippage describes the gap between a transaction’s expected price and the execution price. When liquidity is low, slippage grows and transactions cost more.
A higher XRP price boosts the value of existing liquidity pools without demanding an increase in token supply, thereby streamlining and lowering the cost of moving large amounts of capital across the network.
XRP As a Utility Asset
XRP was engineered to function as a bridge currency, enabling the transfer of value between entities that lack a shared currency or direct financial tie. Scaling this capability requires deep liquidity: greater depth results in tighter spreads and reduced transaction expenses.
Schwartz’s comments validate that price growth is intertwined with XRP’s utility. Nevertheless, observers continue to question why XRP’s price has not surged given its role. The XRP community has maintained for years that the asset trades below its true utility value, a viewpoint that Schwartz’s technical explanation helps substantiate.