Ripple has published its vision and roadmap for institutional DeFi on the XRP Ledger. It essentially covers key functionalities, including, but not limited to, value transfer, issuance, credit, and exchange.
Several key innovations within the ecosystem are Automated Market Makers, Decentralized Identifiers, Oracles, Multi-Purpose Tokens, and the XRPL-native Lending Protocol. Some are live, some are in the final stage of implementation, and some are scheduled for a launch in the near future.
The Automated Market Maker, also known as AMM, is already live. It enables the community to access automated trading, provide liquidity, and improve the market’s efficiency.
Its features and benefits are protocol-native, aggregated liquidity, limit order book integration, and a continuous auction mechanism. Its use cases span across financial and non-financial services. The former entails the creation of sophisticated DeFi services like yield farming, trading platforms, and liquidity management systems. Non-financial services include aspects of the NFT platform or digital goods marketplaces.
Orchestra Finance, Sologenic, and Crossmark are some of the players leveraging the potential of AMM functionality.
DiD, an acronym for Decentralized Identity, is defined as a new type of identifier. It enables digital identities that are self-sovereign and verifiable. DiDs are fully controlled by their respective owners. This is in sharp contrast to the traditional method, wherein centralized identifiers are not under the control of their owners.
Its use cases are relevant for users, issuers, and verifiers. Users possess the corresponding private key, and issuers verify the data associated with the DiD. A verifier validates its authenticity. Heirloom and Fractal ID are leveraging it on the XRP Ledger.
Oracle’s 2.2 release has committed to providing institutions with access to reliable data feeds. Therefore, it enhances the experience for smart contracts and DeFi applications and will facilitate a wide range of utilities, like event data and price feeds.
The MPT, short for Multi-Purpose Token, is tentatively slated for launch in the third quarter. It will bring enhanced functionality and flexibility to the XRP Ledger and permit the creation of a complex token structure that can represent multiple assets and rights via metadata.
That said, XRP has not yet reacted to the announcement. The token has been rallying, with a 2.05% drop in the last 24 hours. It is listed at $0.5173, which also reflects a dip of 2.13% in the last 7 days. The market cap is down by 2.04%, while the 24-hour trading volume is up by 12.09% at the time of writing this article.
The community has responded positively, saying that XRP Ledger is on the verge of becoming a hub for institutional DeFi backed by performance and compliance. Others are now looking at how it affects the performance of its native token in the market.