Withdrawing XRP from exchanges to self-custodial wallets
Many XRP holders keep their tokens on centralized exchanges, where the exchange manages the account and holds the private keys on the user’s behalf. This is known as custodial storage. Some users, however, prefer to hold XRP in their own wallets and manage their own keys; this is known as self-custodial.
It’s important to understand the difference between these two concepts before withdrawing assets from an exchange.
Custodial vs. self-custodial accounts
- Custodial accounts are accounts where a third party, such as a cryptocurrency exchange, manages private keys and stores assets on a user’s behalf. If you’ve used a centralized exchange (e.g. Coinbase, Binance) to acquire XRP and keep it there, then you are custodying your XRP with that platform.
- Self-custodial accounts are accounts controlled directly by the user through a crypto wallet application. Self-custodial wallet users are responsible for securing their own assets and managing their own private keys.
What does self-custody enable?
Holding XRP in a wallet you control allows you to interact directly with the XRP Ledger (XRPL) and with tools that rely on signing transactions with your own keys.
On Flare, for instance, users who use self-custodial XRPL wallets have the option to explore on-chain features such as minting FXRP or staking stXRP for yield. These, along with other DeFi and on-chain activities require a user-owned wallet address and private key, which custodial accounts do not provide.
Withdrawing XRP from exchanges to self-custodial wallets
If you decide to hold XRP in your own XRPL wallet (self-custody), rather than keeping it with an exchange or custodial service, you’ll first need to withdraw XRP from the exchange.
The steps will vary depending on the exchange you’re using and the self-custodial wallet you would like to move your XRP to, but the general concepts are usually similar:
1) Locate your XRPL address
Open your self-custodial wallet and look for your XRPL address, also referred to as your r-address. This is where the exchange will send your XRP when you withdraw. Think of it like a physical address where a company can ship you something you ordered.
2) Find the Withdraw or Send option on your exchange
On your exchange account, look for buttons labeled Withdraw, Send, or Transfer. Each of these means the same thing. This is what you’ll use to specify the destination address (your self-custodial XRPL address), network, and amount of XRP you would like to send.
3) Select the correct network
When withdrawing XRP from your exchange, you will be prompted to choose a network. Because you are sending your funds to an XRPL wallet, you will select XRPL as the network. Note that some exchanges may label the network as XRP or Ripple.
Make sure you choose the right network, as sending to the wrong network may result in the funds being sent to a different chain entirely.
4) Find destination tags
Destination tags are identifiers used primarily by custodial platforms, where many users share the same XRPL address. Therefore, custodial platforms often require a destination tag when funds are deposited into the platform.
If the r-address is like a home address, the destination tag functions like an apartment or unit number.
Self-custodial XRPL wallets generally do not require destination tags. If your exchange prompts you to write down a destination tag, even though your receiving XRPL wallet does not require one — you can simply enter any number that fits the exchange’s requirement.
5) Review before confirming
No matter where you’re sending assets, it’s good to get into the habit of always double-checking the destination address, network, and tag (when applicable). Once the exchange broadcasts the transaction to the XRPL, settlement usually takes a few seconds.
Examples of self-custodial XRPL wallets
Below are a few examples of popular self-custodial XRPL wallets, along with direct links to how-to guides for each.
- Xaman: Withdrawal guide
- Bifrost: Withdrawal guide
- Luminite: Withdrawal guide
This list is not exhaustive; it’s simply intended to give users a starting point and for locating the appropriate documentation for their chosen wallet.