The XRP Ledger charges two very different things that people often mix up. One is the transaction cost, a tiny fee of about 0.00001 XRP that is destroyed on every transaction. The other is the reserve, a minimum balance of a few XRP you have to keep in your account but never actually spend.
Getting the difference straight matters, because one is money that leaves for good and the other is money that stays yours. This guide covers both, plus how the fee reacts to network load and how you can get a reserve back. It stays on the XRP Ledger's own costs, not the separate fees an exchange might charge. For the wider settlement picture, see the parent, how the XRP Ledger works.
A note on register: this is a detailed, mechanics-level topic. The reward is knowing exactly where your XRP goes when you transact.
The transaction cost: a tiny fee, burned not paid
Every XRP Ledger transaction must destroy a small amount of XRP. The current minimum is 0.00001 XRP, written as 10 drops. It is not paid to anyone; the XRP is irrevocably destroyed, the ledger's defense against spam and denial-of-service attacks (source: XRP Ledger, transaction cost).
That "burned, not paid" design is the key contrast with other networks. Bitcoin miners and Ethereum validators collect the fees users pay. On the XRP Ledger there is no such recipient, so there is nothing to compete over and no incentive to push fees up. The cost exists only to make flooding the network expensive, not to reward anyone.
The amount is deliberately trivial in normal conditions. At 10 drops, a standard payment costs a tiny fraction of a US cent, which is why moving XRP between wallets is essentially free from a fee standpoint. Even a failed transaction still pays this cost once it lands in a validated ledger, because the point is to charge for the network load a transaction creates, whether or not it succeeds.
How the fee reacts to network load
The 10-drop figure is a floor, not a fixed price, and one XRP is a million drops. Each server sets a load-based threshold, plus a second bar called the open ledger cost. Once a ledger passes a soft limit, the cost rises exponentially for each extra transaction, so during a surge the fee climbs fast.
Transactions that do not meet the open ledger cost are not rejected outright. If a transaction still looks likely to make it in, the server holds it in a queue and tries again in a later ledger. This escalation is self-correcting: the moment the flood stops, the soft limit resets and the cost drops back to the 10-drop minimum. It is a fee market that only switches on under stress and switches straight off again afterward.
This is why wallet software usually auto-fills the fee based on current load, and why it is sensible to set a slightly higher fee than the bare minimum if you want a transaction to go through during busy periods. The base fee itself can also change over the long term, but only through the same validator vote that governs other network settings, not at any one party's discretion.
The reserve: a minimum balance you keep, not a fee
The reserve is different from the fee. To exist in the ledger, an account must hold a minimum of XRP: currently a 1 XRP base reserve plus 0.2 XRP per object it owns (source: XRP Ledger, reserves). This XRP is not spent or destroyed. It is locked as a floor you cannot send while the account is open.
The reason is storage, not revenue. Because every validated ledger version carries the full current state of the network, each account and object it holds takes up permanent space. The reserve puts a small price on that footprint so the ledger cannot be cheaply bloated with junk accounts, keeping it small enough to run on ordinary hardware.
Two useful details soften the "locked" feeling. Your reserve is not dead money: it can still be spent on transaction fees, so you are really pre-funding your own future costs. And the requirement is not permanent policy set in stone; validators can vote it up or down over time, as they did when the base reserve was lowered to its current level.
What adds to your reserve, and by how much
Beyond the flat 1 XRP base, your reserve grows by 0.2 XRP for every ledger object your account owns. Objects that count include trust lines for issued tokens, open trade offers on the built-in exchange, escrows, payment channels, checks, tickets, and pages of NFTs. The more of these you hold, the higher your minimum balance climbs.
A quick example makes it concrete. An account holding two trust lines and one open offer owns three objects, so its total reserve is 1 XRP plus three times 0.2 XRP, which is 1.6 XRP. Cancel that offer and close the trust lines, and those objects disappear from the ledger, dropping the requirement back toward the 1 XRP base. Reserves rise and fall with what you actually keep on-ledger, and NFTs are grouped into pages so they cost far less than 0.2 XRP each.
A couple of quirks are worth knowing. Trust lines are shared between two accounts, and in the usual case only the token holder owes the reserve, not the issuer. There is also a narrow allowance: an account funded with exactly the 1 XRP base reserve can create its first two trust lines without the extra owner reserve, though funding it with more brings the normal per-object charge back. The practical takeaway is simple: hold only the objects you actually use, because each one you leave open keeps a little more of your XRP tied up.
Getting your reserve back: deleting an account
The base reserve is not lost forever. If you no longer need an account, you can send an AccountDelete transaction, which removes the account and sends most of its remaining XRP to another address you choose (source: XRP Ledger, deleting accounts). That is how you recover the bulk of the 1 XRP base reserve.
There is a catch that keeps this from being abused. Deleting an account costs a special, higher fee: you must destroy at least 0.2 XRP to do it, and the account has to own no more than 1000 objects. Some objects, such as an escrow that has not matured or a token you have issued to someone else, block deletion until they are cleared. So you get most of your reserve back, minus that 0.2 XRP, once the account is genuinely clean.
This is also a good reason not to create XRP Ledger accounts you do not need. Because every ledger version stores the full current state, each account is permanent weight on the network, which is exactly what the reserve is pricing in the first place. Businesses that serve many users tend to run one account, or a handful, and tell customer payments apart using destination tags rather than opening a fresh account per user.
Why XRP's fees and reserves stay so low
Step back and the design goal is clear: keep everyday use cheap while protecting the shared ledger. XRP transactions are widely regarded as fast and low-cost (source: Investopedia, Ripple and XRP). That is precisely because the fee is a burned fraction of a cent rather than an auction won by the highest bidder.
The reserve plays the counterpart role. It is not there to earn anyone money but to price the permanent storage each account uses, which is why it stays at a couple of XRP rather than anything larger. That combination, cheap transfers plus a small refundable reserve, is a big part of why XRP is positioned for fast, low-cost payments (source: Kraken, what is XRP). Together they keep the network both spam-resistant and inexpensive to use. If you are about to move XRP for the first time, it is worth pairing this with the basics of how to send and receive crypto, and the burned fee's effect on total supply is covered in XRP tokenomics and escrow.
Frequently asked questions
Is the reserve gone forever, or can I get it back?
You can get most of it back. The reserve is locked, not spent, so it stays your XRP while the account is open. If you close the account with an AccountDelete transaction, most of the remaining balance is sent to another address you choose. You do have to destroy at least 0.2 XRP to delete, so you recover the base reserve minus that amount.
Why does XRP get destroyed instead of paying validators?
Because the fee exists to deter spam, not to reward anyone. XRP validators earn no block reward, so there is no recipient to pay. Destroying the fee makes flooding the network genuinely costly while removing any incentive to bid fees higher. It also slowly and slightly reduces the total XRP supply over time.
What happens if my balance drops below the reserve?
Your account keeps existing, but it is restricted. You cannot send XRP away or create new objects that would raise your reserve requirement. You can still pay transaction fees and receive XRP, and once enough arrives to clear the requirement again, the restrictions lift. A falling reserve requirement can also put you back above the line.
Researched and written for the BloFin Academy. This article is educational and is not financial, investment, or legal advice. Always do your own research.