Ripple issued an announcement on February 25, announcing its institutional-level DeFi development plan for XRP Ledger (XRPL), aiming to build XRPL into a secure and scalable first-level public chain and attract financial institutions to apply blockchain technology within the compliance framework.
The core of this plan is to develop decentralized exchanges (DEX), credit-based DeFi lending protocols, and the new multi-purpose token (MPT) standard. These applications will be integrated with XRPL's decentralized identity identification (DID) technology to ensure compliance with regulatory requirements.
Illustration: Ripple plans to launch blockchain functions and DeFi applications in 2025
Riper stressed that this plan will make full use of existing infrastructure, including oracles and automated market makers (AMMs), thereby accelerating the construction of the DeFi ecosystem of XRPL.
XRP prices have risen significantly recently, and have increased by more than 300% since Trump took office. As of February 26, XRP had a market value of approximately US$128 billion, ranking among the top five cryptocurrencies in the world.
However, despite the rising XRP price, XRPL's total lock-in value (TVL) is still much lower than its competitors. For example, Ethereum's $50 billion is in sharp contrast to XRPL's approximately $80 million, indicating that its DeFi ecosystem still has huge potential for development.
This is related to the fact that XRPL did not support third-party smart contracts in the past. DeFi applications on XRPL, such as AMM, are currently driven by the Ripple development team. Nevertheless, Ripple CEO Brad Garlinghouse said in January that XRPL's DEX has processed more than $1 billion in cryptocurrency transactions after it went live in 2024, indicating that there is still demand for it.
Ripple hopes to promote a new round of growth in XRPL through the application of institutional-level DeFi and real-world assets (RWA). According to Colin Butler, head of global institutional capital at Polygon, the RWA tokenization market is as large as US$30 trillion, with huge potential.
In addition, after the Trump administration took office, U.S. crypto-regulatory policies may turn to be more friendly. Trump has pledged to build the United States into a "global cryptocurrency center" and plans to appoint officials supporting the crypto industry to manage the Securities and Exchange Commission (SEC).
Several asset management companies have applied for XRP spot ETFs. JPMorgan analysts believe that if the XRP ETF is approved, it may attract billions of dollars inflows.
The SEC lawsuit against Ripple is also likely to be revoked. The case has affected the XRP market since 2022, but the SEC recently revoked an investigation into decentralized exchange Uniswap, which suggests regulators may adjust their attitude toward cryptocurrencies under Trump’s administration, and the Ripple case may also benefit from it.
Ripol launched an institutional-level DeFi development blueprint to attract financial institutions to use XRPL in a compliant environment and to enhance their competitiveness through RWA tokenization, lending protocols, DEX and new token standards. However, XRPL's current on-chain activity is still behind Ethereum, and whether it can use this plan to turn the situation around remains to be tested by the market.
But driven by the support of the Trump administration, potential ETF listings and the softening of SEC regulatory attitudes, the future development of XRP and XRPL deserves continued attention.
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