In a recent podcast episode, host Krippenreiter and XRP Ledger validator Vet explained what they describe as XRP’s most misunderstood strength — its built-in role within XRPL.
The discussion stressed that XRP is the core asset supporting liquidity, compliant DeFi, and institutional foreign exchange on-chain.
Key Points
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XRPL validator Vet says XRP’s core utility lies in its built-in role as the Ledger’s native settlement asset.
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Autobridging routes trades through XRP to improve liquidity and price discovery on the DEX.
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Permissioned DEX upgrades aim to bring compliant, institutional-grade DeFi on-chain.
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Growing FX and stablecoin activity on XRPL could drive long-term structural demand for XRP.
XRPL Was Always Built as a Multi-Asset Ledger
According to Vet, the XRP Ledger was never designed to be a single-asset network like Bitcoin. He noted that from day one, XRPL launched with:
- A native decentralized exchange (DEX)
- Tokenization through issued assets
- Multi-currency support
This setup allows users to create stablecoins, tokenize assets, and trade directly on-chain without needing external smart contracts.
Vet said this functionality was not added later; it was part of the original design. The goal was to build a financial infrastructure layer for payments, foreign exchange, and tokenized assets.
At the center of it all is XRP.
XRP: The Neutral Asset at the Center
One of the key points from the podcast was XRP’s neutrality. Unlike issued tokens that require trust lines and carry counterparty risk, XRP does not depend on any issuer.
It does not require a trust line to hold and serves as the ledger’s only native settlement asset. Every transaction on the XRP Ledger requires XRP. Fees are paid in XRP and burned, making it deflationary by design.
Beyond fees, its larger role is liquidity.
“You cannot do anything on XRPL without XRP,” Vet explained. “XRP is in the middle of everything.”
The “Hidden” Utility
Meanwhile, the discussion highlighted that one of XRPL’s most overlooked features is autobridging. This feature automatically routes trades through XRP when doing so improves pricing and liquidity.
For example, if there is no direct liquidity between two stablecoins, the ledger can route a trade like this:
EUR stablecoin → XRP → USD stablecoin
This makes trading more efficient and improves price discovery.
Vet noted that autobridging works on both the public DEX and the new permissioned DEX. The only limitation is that trades cannot bridge between public and permissioned environments. Within each environment, however, the feature works normally.
Institutional DeFi and the Permissioned DEX
Recent upgrades, including permissioned domains, credentials, and a permissioned DEX, are now live on the XRP Ledger. These features seek to bring compliance-ready financial infrastructure on-chain.
This aligns with Ripple’s push into institutional finance through products like Ripple Payments and the launch of Ripple USD (RLUSD).
The discussion also pointed to the growing stablecoin ecosystem on XRPL, including:
- Euro Convertible from Societe Generale Forge
- Ripple USD (RLUSD)
- Other fiat-backed tokens already live on-chain
As more fiat-backed assets launch on XRPL, demand for FX swaps and cross-border liquidity is expected to increase. XRP remains central to that liquidity routing.
Why This Matters for XRP Demand
The key takeaway was not short-term price movement, but long-term structural demand. If institutions use permissioned DEXs for FX swaps and cross-border payments, market makers will need to hold XRP to provide liquidity.
Higher trading volume could mean more XRP to keep markets efficient. This creates a direct link between network usage and XRP’s functional demand.
Unlike networks such as Ethereum, where DEX activity runs through smart contracts that collect protocol fees, XRPL’s DEX is built directly into the protocol. There is no separate layer extracting fees; the infrastructure is native.
For institutions seeking a neutral and censorship-resistant settlement layer, that design could be a significant advantage.
Ultimately, while many in the community focus on short-term price swings, Vet argued that institutional adoption and on-chain FX growth are the real drivers.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.