XRPL’s CTO Proposes a Fee Refund Model: A Game-Changer or a Headache? 🤔💰

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In a world where the only constant is change, and the only predictable thing is unpredictability, David Schwartz, the CTO of Ripple, has thrown a new idea into the mix that’s as straightforward as a brick to the face, but potentially as game-changing as a flying elephant. He’s proposed that the XRP Ledger (XRPL) should refund any fees users don’t actually spend. Imagine that! A world where you don’t have to pay for the compute you don’t use. 🎉

The idea came about after a group of developers from the XRP Ledger ecosystem decided to explain how the Xahau Hook engine works. It’s a bit like explaining the rules of a game where the rules keep changing, but bear with me. When a hook is created, the system calculates a fixed execution fee upfront. This fee is like a fixed toll on a bridge, and it doesn’t change later, no matter how much or little you drive. 🚗

While this makes costs predictable, it also means users often pay for compute they don’t use. It’s like buying a buffet and only eating a salad. Developer Mayukha Vadari pointed out that this is different from Ethereum, where users specify how much gas they’re willing to spend, and if their transaction consumes less, the leftover gas is refunded. On XRPL, there’s no such thing as a refund, because the network always assumes the worst-case compute cost. It’s like the network is a paranoid accountant who always rounds up to the nearest hundred. 🧮

“The transaction fee is just the worst-case scenario compute on the hook,” Vadari noted, “so you’re almost always paying too many fees.” This led to a simple but pointed question from Vet, co-founder of NFT platform XRP Cafe: Why can’t XRPL offer refunds for overpaid hook fees? It’s like asking why you can’t get a refund for the extra ketchup packets you didn’t use. 🍟

Vadari responded that the hook fee isn’t seen as overpaid; it’s static by design. Changing that would be a big move, one that could affect how the network operates fundamentally. But Vet wasn’t convinced. He pointed out that if a user pays more than the actual network or load fee, the excess should go back to them. It’s only fair, right? 🤷‍♂️

When protocol developer tecqu joined the conversation, he raised a practical concern: if users knew they could get refunds, wouldn’t everyone start overbidding just to gain priority? That would distort the fee market and potentially overload the system. It’s like if everyone started bidding $100 for a $5 item on eBay, just to make sure they got it. 🛍️

That’s when David Schwartz entered the thread and proposed something new. He suggested a model where everyone pays a fee upfront, but only the minimum required to enter the ledger would be retained. Anything extra would be refunded:

“Compute the fee level required to get one more transaction into the ledger after the consensus transaction set is determined and rebate any fee above that level,” he said.

I like the idea of charging every transaction in the ledger the same fee level when possible but prioritizing transactions based on the maximum fee they were willing to pay. — David ‘JoelKatz’ Schwartz (@JoelKatz) June 16, 2025

Schwartz acknowledged that this idea, while promising, could create complications. In XRPL’s current architecture, not all validators might agree on what that minimum required fee actually is. And if they disagree, it could lead to a split in ledger history, a risk that must be avoided. “You might have to tweak that a bit to make it not break consensus,” he admitted, “but that shouldn’t be too hard.”

He also shared a fallback option: refund anything above the median fee level for transactions in a ledger. That method would sidestep validator disagreements and offer a more predictable baseline. To avoid irregularities when the network is under low load, Schwartz proposed a simple rule: if there are fewer than 10 transactions in a ledger, the refund mechanism could be disabled or replaced with a minimum fixed fee.

Right now, XRPL burns all transaction fees, even the extra portion that wasn’t actually required. This helps reduce XRP’s overall supply, but it also means users often pay more than necessary, especially when Hooks are involved. David Schwartz isn’t trying to stop fee burning altogether. What he’s putting forward is a smarter way to handle it, one where any extra, unused part of the fee could be returned. It’s a fairer model that still keeps the system running the way it should.

At the heart of this whole discussion is a simple point: the way transaction fees are designed really does make a difference. Ethereum lets users overestimate and refunds unused gas. XRPL, on the other hand, locks in a fixed fee. Now, Schwartz’s idea of partial refunds adds another option to that mix, one that tries to balance fairness, ease of use, and network stability.

For now, it’s just an idea. But it’s one that’s getting attention, and could shape how fees work on XRPL in the future. But the fact that it’s coming from Ripple’s CTO, and is gaining traction in public discussions, means it could evolve into something more serious. So, watch this space, and maybe keep your wallet handy. 🕵️‍♂️💰

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2025-06-16 15:50