Cryptocurrency analyst Iso Ledger warned investors and XRP holders to take a closer look before putting money into it com. earnXRPa new product linked to Upshift and Flare Network. While others discuss the earning potential Fixed passive income With this new system, Iso Ledger shows more caution. In a recent breakdown, the analyst explained what happens when a holder deposits his or her XRP, focusing on the fees, expected returns, and risks involved.
EarnXRP shows slow returns and high fees
In X’s post on April 29, Iso Ledger He explained Although EarXRP may seem attractive and profitable at first, the payout system is riddled with issues that delay actual returns and impose high costs. XRP holders. The analyst showed that before making any return, users actually lose a portion of their XRP through multiple fees involved in the process.
To show this, Iso Ledger has broken down every step that occurs and the exact costs involved when holders deposit 1,000 XRP. He noted that the process begins by converting XRP into… FXRP, wrapped version On the FLIR network. He stated that simply minting XRP to FXRP requires a small fee reduction of around 0.5-1%.
Next, users must deposit their 1,000 XRP into the Upshift vault, which requires another fee, leaving them with just 993 FXRP. Furthermore, there is a network and service fee of around 1,149,875 XRP. Furthermore, when it comes time to checkout, users also face a refund fee of around 0.5%. The total round trip cost comes out to about 13 XRP on a deposit of 1,000 XRP.
Iso Ledger compared this cost to EarnXRP Expected Return. While the fund claims to target returns of up to 10%, it noted that a more realistic estimate puts earnings at just 4% per year. This means that users will receive around 40 XRP per year just when they deposit 1,000 XRP. Accordingly, the analyst said it will take bondholders roughly four months to recover the initial fees before they see any real profit.
Iso Ledger also noted that increasing deposit size does not change this result. Whether the user deposits 1,000 or 10,000 XRP, the fee percentage remains the same. He also added that the timeline for breaking even remains unchanged, and large deposits still face the same delay before users make any profits.
Risks associated with EarnXRP smart contracts and system architecture
In addition to the fees and potential returns, Iso Ledger highlighted several risks associated with EarnXRP. He explained that the system runs on smart contracts, which can sometimes contain errors or be targeted by hackers and bad actors. He also pointed out the danger of non-permanent loss, as… Changes in market conditions It can cause the value of user funds to decrease while they are locked in the system.
Iso Ledger also pointed out that EarnXRP carries trading risks when users borrow assets and spread them across markets. If the price gap between those markets becomes smaller, returns can decline. Furthermore, withdrawals on EarnXRP can take up to 72 hours, which means users may not be able to access their funds fast enough.
He raised another concern, noting that since FXRP is a wrapped asset, it relies on a bridge system. Iso Ledger claimed this dependency It adds another layer of risk for XRP holdersBridges are known as weak points in encryption systems. This concern reflects previous incidents such as: Exploit Kelp DAOMore than $290 million worth of restocked ether was stolen after a hacker exploited vulnerabilities in the rsETH bridge used by the protocol.
Furthermore, Iso Ledger added that after publicly auditing Upshift one week ago and submitting five questions, only one answer has been provided so far, “on it,” demonstrating a lack of clear communication and transparency. He said he would rather wait XLS-66d, an upgrade coming Which can offer similar return options directly on the XRP Ledger without the need for wrapped assets or bridges.
Featured image from Adobe Stock, chart from Tradingview.com
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