They say you can make money by depositing XRP...Why are the actual returns so low?

▲ XRP

An analysis has emerged suggesting that the structure of earning profits by depositing XRP yields lower actual profitability and higher cost burdens than expected.

According to a report by Bitcoinist on May 3, cryptocurrency analyst Iso Ledger specifically analyzed the profit structure and costs incurred when depositing XRP into an earnXRP product. This product utilizes FXRP conversion based on the Flare Network and Upshift vaults.

According to the analysis, if an investor deposits 1,000 XRP, a fee of approximately 0.5-1% is incurred during the process of converting XRP to FXRP. Subsequently, additional costs arise during the vault deposit process, reducing the actual holdings to around 993 FXRP. Furthermore, network and service fees of approximately 1.149875 XRP are additionally deducted.

A redemption fee of approximately 0.5% is also imposed during the withdrawal phase, bringing the total round-trip cost to about 13 XRP. This structure means that a certain portion of the initial investment is already depleted before any profit is generated.

Although the product offers a maximum yield of 10%, the realistic expected annual return is analyzed to be around 4%. Based on 1,000 XRP, the annual profit remains at approximately 40 XRP, and it is calculated that it takes about 4 months just to recover the initial fees.

Iso Ledger pointed out that “there is a significant difference between the apparent yield and the actual profit,” emphasizing that investors must fully understand the structure and costs.

This analysis demonstrates that, contrary to the perception that XRP-earning products provide stable returns simply by depositing, there are complex cost structures and issues of delayed profits.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*