What is XRP (Ripple)? Destination tags, the reserve and safe transfers
XRP is the coin of the XRP Ledger, a network built for fast and cheap transfers. It works a little differently from Bitcoin or USDT: deposits to exchanges often need a destination tag, and every account keeps a small amount of XRP locked as a reserve. Here is what that means for you.
XRP and Ripple are not the same thing
XRP is the native coin of the XRP Ledger, a public blockchain that has been running since 2012. Ripple is a company that builds payment products around it. People often say “Ripple” when they mean the coin, but the price and the transfers you deal with are those of XRP.
All 100 billion XRP were created when the ledger started, so no new coins are mined. A tiny fee in XRP is destroyed with every transaction, which protects the network from spam.
How an XRP transfer works
XRP addresses start with the letter r. A transfer is confirmed by the network’s validators in a few seconds, and the fee is a fraction of a cent paid in XRP.
There is no separate token standard to choose for XRP itself: XRP lives only on the XRP Ledger. If a service offers “XRP” on another network, that is a different, wrapped asset, and sending it to an XRP Ledger address will not work.
The destination tag: why exchanges ask for it
Many exchanges receive every customer’s XRP at one shared address. To know whose deposit it is, they give each customer a number called a destination tag. It is not a password and not a secret; it simply tells the exchange which account to credit.
If the exchange shows a destination tag on its deposit page, you must enter it when you send. A deposit without the required tag reaches the exchange’s address but is not credited to you, and recovering it depends on the exchange’s support. A personal wallet address usually needs no tag.
The account reserve
Every XRP Ledger account must hold a minimum amount of XRP that cannot be sent. On the main network today, the base reserve is 1 XRP, plus 0.2 XRP for each object the account owns, such as a trust line or an open offer. Validators can vote to change these amounts, so check the current figures before relying on them.
Two practical consequences follow. A new address only becomes active once it receives at least the base reserve, so a smaller first deposit fails. And the reserve part of your balance is not spendable, even though it is still yours.
| Topic | What to know |
|---|---|
| Address | Starts with r; XRP exists only on the XRP Ledger |
| Fee | A tiny amount of XRP, destroyed with each transaction |
| Destination tag | A number many exchanges require on deposits |
| Base reserve | 1 XRP that stays locked in every active account |
| Owner reserve | 0.2 XRP more for each object the account owns |
| New address | Needs at least the base reserve as its first deposit |
Common mistakes to avoid
- Leaving out the destination tag when depositing to an exchange.
- Sending less than the base reserve to a brand-new address.
- Sending “XRP” from another network to an XRP Ledger address.
- Expecting to send your whole balance: the reserve always stays behind.
XRP in Waletifi
Waletifi supports the XRP Ledger. On the receive screen you see your r-address and how much of your balance is held as the reserve. When you send, the app shows the fee and asks for the destination tag where the receiver needs one, and everything is shown before you confirm.
Your keys are created and kept only on your phone, and we can’t move your funds. Write your 24-word recovery phrase on paper and keep it somewhere safe.
