Ripple wants to introduce staking function? Chief Technology Officer discusses the "two-layer consensus model": adding a DeFi revenue layer to XRP

Old public chain Ripple is exploring the feasibility of introducing a staking function to bring new attractions to the spot ETF market. How can this be achieved?
(Preliminary briefing: Analyzing the distribution of XRP chips, who owns the most Ripple coins?)
(Background supplement: Five Ripple XRP spot ETFs have been listed on DTCC and will start trading on Nasdaq as soon as this week)

Contents of this article

After Trump was re-elected as President of the United States, the veteran public chain Ripple (Ripple) not only ended the protracted legal battle with the U.S. SEC, but its tokens XRP (which has been accused by the SEC of being an illegal security) has finally ushered in its first spot ETF product and was officially listed for trading on the US stock market this month.

However, when funds try to enter Ripple ETFs, investors' realistic needs for greater returns also hit: XRP does not have a native pledge mechanism like Ethereum or Solana and cannot provide investors with additional pledge income. Therefore, it appears to be "insufficient in productivity" in an environment where various altcoin ETFs are listed. In this regard, Ripple Chief Technology Officer David Schwartz proposed a "dual-layer consensus" solution, trying to give this old public chain its own revenue engine without shaking Ripple's core consensus mechanism (PoA).

Institutions want more than price fluctuations

The birth of XRP ETF allows institutional investors to finally allocate XRP positions directly under the compliance framework. But for Wall Street, this is obviously not convincing enough. What they care more about is stable cash flow.

Currently, the annualized return rate for Ethereum staking is about 3% to 4%, and Solana also provides similar levels, which further amplifies XRP’s zero-interest shortcoming. In this regard, Ripple Engineering Director J. Ayo Akinyele recently stated bluntly that the future Ripple ecosystem "cannot only talk about liquidity, but also about asset productivity." Otherwise, market funds will shift to public chains and tokens that are more profitable.

1/6 XRP has always been about moving value quickly and efficiently. Over the years, it has gone from powering payments to helping settle tokenized assets and enabling real-time liquidity across different markets.

— J. Ayo Akinyele (@ja_akinyele) November 18, 2025

New dual-layer consensus model

In order to introduce the staking function without "changing" the original consensus mechanism, Ripple chief technical officer David Schwartz proposed a "dual-layer consensus model" in an attempt to introduce a true native staking and reward mechanism for XRP without sacrificing XRPL speed and low cost.

Specifically, the first layer (outer layer) completely retains the current design: all validators continue to use the original Proof-of-Association (PoA) mechanism and quickly decide which transactions can be entered into the ledger every 3-5 seconds. This layer does not involve staking or rewards, ensuring that cross-border payments are still fast and cheap; the second layer (inner layer) adds a small "core validator circle" with only about 12-20 places. Who can enter this circle depends on who has the most XRP pledges. Anyone can pledge their XRP to "the verifier I trust." The more pledges and supported verifiers, the easier it is to be elected as a core verifier. Only this group of core validators are responsible for actually producing blocks, signing the final ledger, and dividing the rewards; if they do evil, the pledged XRP will be directly forfeited.

As for where the staking rewards come from? Instead of printing new coins, it mainly relies on additional handling fees generated by future smart contracts, AMM, stable currency RLUSD and other functions, as well as part of the transaction fees that were originally intended to be burned. This will allow long-term holders and validators to receive benefits without destroying the deflationary characteristics of XRP. To put it simply: the outer layer is responsible for "fast and economical", and the inner layer is responsible for "who produces the blocks and who gets the money." The two-layer division of labor allows XRPL to continue to be the king of payments and to safely upgrade to a DeFi platform with staking returns. This is the blueprint for native staking as envisioned by Schwartz.

Schwartz emphasized that such a two-layer design can be added with revenue equipment "without tearing down the house". He described it as:

"The outer layer is like a safe, and the inner layer is like a laboratory. We want the two not to interfere with each other, but to share value."

The pros and cons of the two-layer consensus model

For this idea, supporters believe that it will help attract more institutional funds and enhance XRP’s core competitiveness in the ETF market brings greater liquidity to XRP.

However, opposing voices believe that the core advantages of XRPL are low cost and fast settlement, and the introduction of staking functions through this model will affect its degree of decentralization and increase complexity. Even Akinyele stressed that this is just an idea and will not be realized in the short term.

Faced with this idea, XRP is now facing an important operation: once the operation is successful, it will become a top public chain with both revenue and regulatory certainty; but if the operation fails, the complex governance mechanism may discourage institutions.