Understanding XRP Ledger Reserves

A bit of history..

The XRP Ledger (XRPL) has some great features!

• Environmentally responsible - Very low carbon emissions
• Super fast settlement - Transactions take about 4 seconds to settle.
• Extremely low fees - Transaction fees cost about 0.000015 XRP or about 67,000 transactions for 1 XRP.
• Incredibility versatile exchange network - Over 8000+ issued currencies, native NFTs, Escrows, multi-signing, a built in DEX and more. 
• Decentralized - Run by a large group of community validators and node operators, it is one of the most democratic blockchains around.

In order to keep the network running safely, smoothly and efficiently, it was decided that a mechanism was needed to:

• make it economically prohibitive to send spam
• help protect the network from a distributed denial of service attack
• help keep the footprint of the XRPL as slim as possible

The mechanism to achieve all of this is?

🎉🎉 XRPL Reserves  🎉🎉

A bit about reserves on the XRPL ...

The XRPL has two types of reserves:

Base reserve

This reserve is required to activate an XRPL account and needs to be maintained in order to submit transactions on the XRPL. The current base reserve is 10 XRP. Each XRPL account must contain at least 10 XRP, which is automatically marked as un-spendable by the XRPL, in order to be able to transact on the XRPL. The base reserve cannot be used or sent to other accounts. It can only be recovered by deleting account from the XRPL.

Fun fact! When the XRPL was first created the base reserve was 1000 XRP! It was reduced to 200 XRP, then to 20 XRP and has now settled to 10 XRP. (The XRPL validators monitor the state of the network and can vote to change the reserve amounts as the blockchain evolves.) 

Owner reserves

These reserves apply to objects on the XRPL that you own in your account. The owner reserve is currently set at 2 XRP per object.

Here is a list of objects that require an owner reserve:

• An escrow
• An open offer on the Decentralized EXchange (DEX)
• A Trust Line for a token
• SIgner list (Multi-sign)
• Checks
• Payment channels
• NFT's (minted prior to the XLS-20 amendment)
• NFTTokenpage ( 2 XRP per page)

Owner reserves can recovered when the object is removed from the account. (i.e.. By finishing an escrow, deleting or fulfilling your offer on the decentralized exchange, removing your Trust Line, etc.)

Many of these operations can be performed in Xumm or by visiting XRPL Services at:

• https://xrpl.services/tools

Does Xumm impose the reserves on my account?

No. The base reserve and owner reserves are a function of the XRP Ledger. They have nothing to do with Xumm. Reserves are automatically applied to your account or to the object you own in your account.

Where does the reserve amount go? Does Xumm hold it?

Any reserve that is applied to your account, stays in your account. The XRP Ledger simply marks the reserve amount as 'unspendable'. When the object is removed from your account, the reserve is marked as 'spendable' again. Xumm does not have access to your funds nor is Xumm involved in the XRPL reserves in any way.

How can I see my account reserves in Xumm?

On the main page of Xumm, press the Explain button.

Xumm should display your Account balance, the amount of XRP available for spending and a list of reserves on your account.

In the above example, you can see that the account has 10 XRP marked as un-spendable to meet the wallet reserve, 8 XRP marked as un-spendable to meet the owner reserves for the NFTs that are being offered for sale (2 XRP for each offer), and 2 XRP marked as un-spendable for Other (see ledger explorer)  

The total reserve amount is 20 XRP.

Wait. What is the "Other" owner reserve and how do I get it back?

When a NFT is minted on the XRPL, an object called NFTokenpage is created to 'store" it.

An NFTokenpage is an object on the XRPL so it requires a 2 XRP owner reserve. In Xumm, we list that under the Other category.

If you would like to recover the 2 XRP for this object you need to get rid of all of the NFTs stored on this page. The site where you minted/purchased your NFTs will have instructions on how to do this.

NFTokenpage concept is a bit of a complicated topic but if you are interested in learning more about it, here's a link to an excellent resource:

• https://xrpl.org/nftokenpage.html

How do I recover the Wallet reserve?

As mentioned above, each XRPL account must contain at least 10 XRP to meet the base reserve requirement of the XRP Ledger. If you would like to recover the base reserve, the only way to do this is to delete your account from the XRPL.

There is a 2 XRP fee for doing this which is levied by the XRPL along with the normal transaction fee which applies to all transactions.

(These fees are part of the XRP Ledger and are in not related to Xumm.)

For more information about how to delete an account from the XRPL, please review this article:

• How to delete your XRP Ledger account