Crypto researcher SMQKE recently explained how XRP investors have an interest in Ripple’s success by simply holding the token.
His latest disclosure was built on the findings of a recent legal report by James C. Spindler for William & Mary Law School, America’s oldest law school.
The original report, released in May 2025, mentioned XRP as an economic proxy for Ripple’s future success. The company has always maintained that XRP is a utility token, not an investment contract. However, the report argued that XRP’s value is connected to the performance of Ripple’s payment network.
Interestingly, Ripple has also mentioned that its payments product uses XRP in a way that does not impact its price. Despite this, the report claimed XRP holders effectively gain exposure to Ripple’s future licensing revenue, even without holding equity or receiving dividends.
Relationship Between XRP Holders and Ripple
After uncovering the report in a previous post, SMQKE recently presented an analogy to help investors and enthusiasts better grasp the relationship between XRP holders and Ripple.
According to him, purchasing XRP is similar to buying a share in a drug patent from a pharmaceutical firm. While the patent itself is not a security and doesn’t promise payouts, its market value depends on the company behind it pushing forward with development and adoption.
Likewise, he claims that Ripple depends on XRP to scale its payment infrastructure, and XRP holders have a direct stake in whether that system succeeds or fails.
SMQKE pointed out that while XRP does not grant voting rights or legal claims over Ripple’s business, it still places holders in a position where their fortunes rise and fall with the company’s progress. For context, investor sentiment around XRP has depended on Ripple’s developments over the years.
SMQKE likens XRP to the intellectual property behind Ripple’s ecosystem, suggesting that token holders become de facto backers of that ecosystem. In his analogy, Ripple is the pharmaceutical firm, XRP functions like the patent, and RippleNet (now part of Ripple Payments) is the real-world application.
Ripple Payments Can Function Independently of XRP
When an XRP holder pointed out that RippleNet can operate without XRP, SMQKE referenced a 2020 study conducted by researchers from Imperial College London and University College London.
🥱 https://t.co/uemaWo0WR0
— SMQKE (@SMQKEDQG) May 20, 2025
According to the study, XRP overwhelmingly dominated payment volume on the XRP Ledger, processing hundreds of millions of XRP daily. Notably, this usage shows how deeply integrated XRP is within Ripple’s infrastructure, even if the company allows clients the flexibility to bypass it.
He also highlighted an Atlantis Press report which claimed that as long as Ripple’s payment solutions remain widely adopted, XRP would continue to function as a central component in cross-border transactions.
However, it is important to note that Ripple itself has confirmed that its payments product can operate independently of XRP. Clients have the option to use XRP as a bridge currency, but they are not required to do so.
