A Surprising Security Ranking
The XRP Ledger (XRPL), which supports the world’s third-largest cryptocurrency, has received a surprisingly low score in a recent security review. According to a quarterly ranking by blockchain research firm Kaiko, XRPL scored just 41 out of 100, placing it last among 15 analyzed blockchains. This ranking puts it behind rivals like Polygon and Stellar and significantly behind Ethereum, which topped the list with a score of 83. The findings raise serious questions about the security posture of a blockchain that has been in operation for over a decade.
Key Factors in the Poor Score
Kaiko’s ranking is based on five key criteria: governance, integration, liquidity, operational efficiency, and security. The security component is a comprehensive assessment that looks at a network’s operational resilience, the decentralization of its validators, the frequency of security audits, and past incidents. While Kaiko did not release detailed sub-scores, a senior analyst pointed to a number of critical issues. The main pain points were a software supply-chain hack that occurred earlier in the year, a low Nakamoto coefficient, and a small number of validators. These factors combined to give the XRPL a poor overall security rating.
The Problem of the Validator Set
A major concern highlighted in the report is the small number of validators on the XRP Ledger. Unlike open networks such as Ethereum and Solana, which have thousands of validators, XRPL operates with only around 190 active validators. More critically, only 35 of these are included in its default unique node list (UNL), a trusted subset used to reach consensus. While this design is intended to optimize for speed and reliability, critics argue that it comes at the cost of decentralization. This limited validator distribution makes the network more susceptible to coordinated attacks or disruptions, as it would take fewer entities to compromise the system. This is directly reflected in its low Nakamoto coefficient, which measures the number of entities required to compromise a network.
A Troubling Software Hack
In April, the XRPL was hit by a software supply-chain hack that injected malicious code into an official software package used by developers. This code was capable of stealing users’ private keys. While the core ledger and its GitHub repository were not directly affected, the incident raised significant alarms about the security of the XRPL’s broader ecosystem. It highlighted a major vulnerability in the software tools used by developers, putting users at risk and underscoring the importance of robust security protocols that extend beyond the core network itself.
A Focus on Speed over Decentralization
The design of the XRP Ledger is a trade-off between speed and decentralization. Its consensus mechanism, which relies on a small, trusted group of validators, allows for rapid transaction settlement. This is in contrast to proof-of-work systems like Bitcoin, which prioritize security and decentralization at the expense of transaction speed. However, as the Kaiko report shows, a hyper-focus on speed can come at the cost of security and resilience. The findings suggest that the limited number of validators and the centralization of trust within the UNL make the network more vulnerable to potential attacks and manipulation.
Implications for the XRP Ecosystem
The results of this security review have significant implications for the XRP ecosystem. The low ranking could deter institutional investors and developers who prioritize security and decentralization. For a blockchain that underpins several services offered by the company Ripple, this finding is a major concern. The report calls into question the long-term viability and trustworthiness of a network that is not only a payment rail but also a platform for future development. While the core team behind XRP has not yet commented on the report, the findings serve as a wake-up call for the community to address these security vulnerabilities.
Read More: Ripple’s Regulatory Clarity: A Catalyst for XRP’s Rise
