How XRP benefits from XRPL, as per Ripple’s CTO
In another round of habitual conversation, Ripple’s [XRP] CTO David Swchartz elucidated the contributions of the XRP Ledger [XRPL] to its underlying token. The discussion started when Zach Rector asked for clarity about XRPL’s financial or material support for XRP.
Realistic or not, here’s XRP’s market cap in BTC’s terms
Schwartz, in his capacity, then tackled an initial response that both projects were competitors. According to him, XRP benefits from XRPL in terms of liquidity and autobridging. This implies that the XRPL automatically connects order books on the ledger by using the token as a middleman to reduce costs.
<p lang=«en» dir=«ltr» xml:lang=«en»>I don't think that's quite the only benefit. They tend to increase the liquidity of XRP both because of autobridging and because of XRP's position as the only asset that has no issuer and that everyone holds. And soon because of AMMs too.— David «JoelKatz» Schwartz (@JoelKatz) April 10, 2023
Furthermore, the CTO mentioned that XRPL and XRP would have a stake as an Automated Market Maker (AMM). Surely, XRP has faced a number of challenges over the years, including regulatory scrutiny and a lack of widespread adoption.
But recently, the token was the star of the market , outperforming Bitcoin [BTC] and Ethereum [ETH] . And thanks in large part to the XRPL, the token’s liquidity has remained strong. The hike in price led to the DEX volume reaching its highest point on 24 March.
Source: Santiment
However, data at press time showed that the volume had decreased to 22,100. This means that the aggregate number of transactions passing through decentralized exchanges had fallen. This translates to a decrease in traders’ interest in jumping on the XRP price action.
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