XRP Ledger vs. Ethereum Layer 2s: Competing for settlement speed

Ripple offered one of the fastest settlement chains, known as the XRP Ledger or XRPL. The ledger aims to compete for scalability and liquidity with Ethereum’s L2 ecosystem, based on settlement speed and the low cost of transactions.

Both solutions offer a similar range of transactions per second, but XRPL has a native finality process, instead of relying on Ethereum. We will cover more details on the XRP Ledger vs Ethereum Layer 2s, with strengths and weaknesses for the different types of chains.

Why settlement speed matters

Payments vs smart contracts vs rollup settlement

Settlement speed, also known as finality, is a key component that may define a network’s use cases. XRPL settles transactions to finality in 3-5 seconds, which is standard for most chains.

There is no preview period or waiting time. When making an Ethereum L2 rollups comparison, all chains have a different time to finality. Those L2 still need to wait for an Ethereum block to make a permanent, secured record.

Payments in crypto can be relatively simple, but smart contract activity creates complexity. Without instant settlement, there are fears of delays or potential exploits.

Rollups also have a relatively long time until final settlement, creating delays in app usage. Rollups can take minutes or even hours until locking in their finality.

Growing institutional interest in fast finality

Institutional finance that uses blockchains is showing concerns about finality. Earlier crypto stages caused days-long delays to ensure transactions are irreversible, for instance, by waiting for multiple node confirmations.

The settlement and finality process can take minutes and cause significant delays in trading and app usage. Fast finality aims to achieve a process that is fair and tamper-proof, but also fast. The biggest challenge is to achieve reliable, fast node consensus without sacrificing security.

Use cases that require instant settlement

Instant settlement can improve the quality of apps using some form of on-chain payment. Those include direct remittances, trading and on-chain swaps, treasury management, and more.

Apps with an on-chain component aim to achieve the speeds that regular users expect from their fintech tools, hence the need for fast settlement and no waiting period until finality.

Users may also want to use their funds quickly, instead of seeing their transaction locked in a transitory state until finality is achieved.

XRPL overview — A purpose-built settlement layer

XRPL is a dedicated settlement layer for both native transactions and connections to other chains. Transactions are validated by a network of permissionless, voluntarily run nodes, which achieve consensus via Unique Node Lists, which contain already vetted validator nodes. 

Consensus model

Ripple built XRPL to have a unique consensus model, which combines a mix of permissionless validators and vetted nodes. Transactions are finalized with the help of Unique Node Lists, where existing nodes are vetted and gain a reputation for reliability. The network thus has a layer of trust and relies on the list mechanism to exclude bad actors.

3–5 second finality

XRPL achieves 3-5 seconds for its finality, based on the confidence in the UNLs. To compare, widely used chains like Arbitrum can reach up to 17 minutes until finality, with 18 minutes for Base. L2 chains usually have a longer time to finality, as they wait to secure their ledger through Ethereum blocks.

Since some chains pay for space in those blocks, they post more rarely, stretching the time to finality. Other chains create a workaround with soft and hard finality, but the process is also slower. For XRPL, finality relies on the chain’s own validators and faces no additional delays.

Low fees and deterministic settlement

The XRPL architecture and validator mix mean the network offers extremely low fees. The usual fee is less than $0.00001. The network has taken into consideration demand from institutions, which prefer fast final settlement, not subject to reversal.

Some of the common chains rely on probabilistic settlement, where the finality is achieved via multiple confirmations. XRPL uses deterministic settlement, meaning the state of the transaction is not even hypothetically reversible once it is finalized.

Why XRPL doesn’t rely on miners/validators for block production

XRPL has abandoned mining in a bid to build a cheaper, yet secure network. The chain also does not use validators, which can also skew the incentive ecosystem or become overly influential. Instead, the chain uses nodes, which are vetted into Unique Node Lists. XRPL also aims to make the network more predictable, which would be impossible with the presence of overly influential miners or validators.

XRPL’s core design: payments + liquidity layers

XRPL is not only used to settle payments, but also provides reserves of liquidity. The chain not only offers simple settlement, but also aims to offer specific tasks that closely track the practices of traditional finance.

XRPL can handle simple XRP transfers, in addition to cross-currency payments, by connecting senders and receivers through orders. Transactions on XRPL can be complex, combining multiple paths and liquidity sources to deliver the desired end balance.

Built-in features: DEX, IOUs, escrow

The potential for complex transactions means XRPL contains some features that are only possible as separate apps on other chains. XRPL has a built-in DEX for swaps between various assets. The chain can carry tokenized IOUs between two counterparties. Currently, XRPL is holding a vote on launching an escrow service.

The XRPL decentralized ledger is thus one of the oldest platforms for built-in blockchain swaps, even before the creation of the first decentralized exchanges with automated liquidity.

Ethereum Layer 2s overview — scaling via rollups

Ethereum has successfully scaled through L2 chains, of which the usage of rollups is the most common type of chain. L2 chains perform a part of their computation offline, later recording the state of the ledger on Ethereum.

Optimistic Rollups

Optimistic rollups use a process where they accept all proposed transactions as valid (optimistic) and rely on fraud proofs, where network participants can challenge the validity of transactions before they reach finality. Usually, those networks have a 7-day challenge window. While transactions are executed instantly, their settlement is delayed for verification and is open to challenges.

zk-Rollups

Zero-knowledge, or ZK rollups, make a different assumption about the validity of transactions. All transactions are processed entirely off-chain, but then for each block, a zero-knowledge proof is created for the batch of transactions in that block. The ZK-Rollup chain then posts the proof with minimal additional data to the main network. 

The ZK-Rollup scaling solution offers more reliable mathematical proofs and can achieve faster finality safely. However, it relies on more computation from nodes to produce the validity proof after checking transactions.

Base

Base is one of the most widely used Optimistic Rollup networks, launched by Coinbase. The network relies on speed, with fast transaction processing, but a finality time of 13 to 19 minutes. The goal of Base is to offer compliant on-chain activity with extremely low fees. Base is one of the networks that spends the most fees for posting its state on Ethereum when transactions achieve finality. 

Shared themes

L2 chains are all capable of near-instant transaction processing, with no delays for confirmations. However, each L2 chooses an interval at which to post the state of its ledger and include it in an Ethereum block. If too many L2 post their state, the fees to post increase. 

There are two ways to post the latest state on Ethereum: calldata or blobs. Both methods require more gas if a larger number of L2 decide to post. In late 2025, Ethereum increased the blobs per block from 6 to 10, giving more leeway to L2 chains to post their ledger without additional fees.

Ethereum updates have decreased posting fees from hundreds of thousands of dollars to a few thousand dollars per day, even for regular blob usage, as in the case of Base.

Settlement speed comparison

Throughput (TPS)

Finality

Why L2 finality ≠ instant

L2 chains have two tiers of finality, one that is local for the network and one when the transaction state is posted on Ethereum. Finality may vary between networks, with up to seven days for Optimistic Rollups and 30 minutes to a few hours for ZK-Rollups. 

XRPL is different in that it has true network finality based on the work of nodes, with no need for soft consensus and additional finality mechanisms. The finality is deterministic and ensured by the selected and vetted nodes, who have no incentives to collude or change the ledger.

Architecture differences that impact speed

Different chains have constraints in handling transactions, which may be due to several sources of delay. Those include validator consensus, block time, and time to finality. We will look over the main differences in network architecture, which affect overall speed. 

XRPL

XRPL is a single-layered distributed ledger that has built-in fast consensus. There are no delays to XRPL blockchain settlement time, at least when it comes to simple payments. However, XRPL is not optimized for smart contracts, which may add layers of complexity.

Ethereum L2s

Ethereum-based L2s introduce a two-tier architecture, where the L2 ledger is finalized on L1, becoming a part of the record in an Ethereum block. One transaction still must go through validators to be approved, and then wait to be finalized in an Ethereum block. 

L2 chains often start with a sequencer, which speeds up transaction execution, but delays finality for disputes. Validator networks are fair and decentralized, but they add delays when reaching consensus between nodes. Those networks work well for apps, but are too slow for instant payments.

Payments use case: who wins?

XRPL is specifically built for cross-border reliable payments, remittances, and liquidity routing. The chain carries relatively predictable types of transfers. 

L2s can perform many functions – decentralized finance, NFTs, and token trading. L2s are programmable, but tend to grow into a large and complex ecosystem.

XRPL wins out on speed, the low cost of whitelisted nodes, and on deterministic finality based on approved validators, with no need for trustless coordination. 

Real-world adoption comparison

XRPL adoption

XRPL has achieved multiple partnerships and institutional settlement tests. The network has actively attempted to drive adoption through partnerships with companies like Azimo and Tanglo.

The partnerships offer access to the On-Demand Liquidity system (ODL), creating corridors for remittances to specific destinations. Azimo, for instance, uses an ODL payment corridor to process remittances to the Philippines. 

XRPL has also tested central bank digital currencies. The network is also open to regular users and can perform swaps as a DEX.

Ethereum L2s adoption

L2s took off quickly, as some were incentivized through token airdrops. Arbitrum, Optimism, Base, and a few other networks took over 13% of Ethereum-based economic activity, especially low-cost DEX trading. 

Various chains had specific use cases, such as NFTs, lending, DEX trading, or token transfers. Starknet and zkSync added to the mix of L2 with their own set of apps. L2 went through a period of turbulence, but returned in 2025 as a staple in the crypto space, handling more traffic and activities. 

Key advantages of XRPL

Ripple’s XRP Ledger, or XRPL, has a short processing time for transactions. Deterministic finality means transactions always take 3-5 seconds, with no need to extend the time to assure confirmations or consensus.

As a result, XRPL has predictably low fees, with no network congestion. Since XRPL carries only transactions, the chain does not suffer from sudden traffic coming from smart contracts.

Ripple’s distributed ledger has operated for a decade, with a proven track record and no outages. XRPL has taken some features from foreign exchange markets, ensuring sufficient liquidity to process payments and transfer value.

XRPL has on-demand liquidity and is capable of transferring value with seamless transactions in different currencies. In this way, XRPL mimics traditional FX exchanges, though with faster on-chain settlement.

Key advantages of Ethereum Layer 2s

The chief advantage of L2s is the overwhelming number of developers building on Ethereum, a total of over 5,300 known creators on the EVM stack. This led to a massive dApp and decentralized finance ecosystem. 

The chains combined incentives, airdrops, and community building with earning opportunities. The flexibility of smart contracts introduced financial innovation into the ecosystem.

Additionally, all protocols were composable with Ethereum, which increased liquidity, token and stablecoin inflows, and the opportunities for lending and settlement across chains. L2 also allows for application-specific chains, also known as L3, with modular tasks on top of the L2 infrastructure. 

Challenges both networks face

XRPL challenges

XRPL has limited potential to launch smart contracts. One of the proposed solutions is XRPL Hooks, which allows a series of instructions to be filled before setting up a transaction on the main ledger. This means the smart contract logic and processing happen off-chain. 

Already established networks are also competing with XRPL for payments. Solana turned into a stablecoin leader, and Stellar directly competes with XRPL with an open-source ledger. 

Liquidity is also scarce, as XRPL planned to use XRP tokens and liquidity from institutions to perform payments. However, the lack of user deposits and a decentralized money market meant XRPL lagged behind the DeFi boom.

L2 challenges

L2 chains have to make a tradeoff between scalability and speed. With over 100 chains, some are still struggling to become decentralized and remove their sequencer server. 

While there are tools to circumvent a sequencer, most L2 chains still go through a centrally approved status of their distributed ledger. Finality also depends on Ethereum blocks and on posting the latest state of the ledger. 

The other problem with L2 is the vast ecosystem, which is complex and confusing, requiring complex bridging and additional fees. This leads to fragmented liquidity, leaving some L2 with insufficient funds, while others remain the central hubs for trading and DeFi.

Which network will lead in settlement speed by 2026?

XRPL will remain a fast platform for transactions, with confirmed deterministic near-instant settlement. ZK-rollups may speed up their settlement to a few minutes and narrow the gap. L2 speeds will remain ideal for smart contract execution, but will retain their delayed finality and remain dependent on Ethereum blocks. 

For some tasks, hybrid models may emerge, combining XRPL transactions with sidechains. L2s may also add new tools for computation and faster verification. 

The preference for chains and platforms will still take into account the specific communities and required tasks.