Wrapped XRP (wXRP) will be coming to the Ethereum (ETH) blockchain next month if all goes according to plan according to an Oct. 31 announcement by Wrapped.com, a cross-chain wrapped assets provider.
The move is meant to enable XRP holders to interact with aspects of decentralized finance, or Defi, such as executing smart contracts for use in borrowing and lending, swapping for altcoins. via their native tokens. Currently, the network can only handle sending, receiving and holding XRP.
Wrapped tokens are digital currencies stored in a digital vault and run on a separate blockchain. Some of the notable wrapped tokens include Wrapped Bitcoin, which operates on the Ethereum blockchain and wrapped Ethereum, which converts ETH to the ERC-20 standard.
Wrapped XRP will be backed 1:1 with XRP - the native cryptocurrency of the XRP Ledger (XRPL)- and held in custody with Hong Kong-based licensed digital asset custodian Hex Trust. Users will be able to use wXRP in their Ethereum wallets, Defi and smart contracts, said David Schwartz, Ripple CTO, in a Nov. 2 tweet. "It's a multichain [world] after all." This was echoed by Monica Long, general manager of RippleX at Ripple, who tweeted:
"This is great not only for XRP utility and liquidity (more apps and use cases) but also for interchain operability. ETH and BTC are already on XRPL via @gatehub, and we'll see more tokens on XRPL."
Calvin Shen, head of sales & business development at Hex Trust said:
"The collaboration with Wrapped.com will benefit the wider XRP ecosystem as we provide the infrastructure to mobilize Wrapped XRP on the Ethereum blockchain. Wrapped tokens improve interoperability across DeFi protocols, create connections between otherwise isolated liquidity, and enable users to transact with a broader range of decentralized applications,"
According to Ripple's Q3 2021 XRP Markets Report, Ripple saw "unprecedented" growth of its on-demand liquidity (ODL), which facilitates cross-border payments by using XRP as a bridge between two currencies. ODL transactions increased130% quarter over quarter and transaction volume on TippleNet more than doubled since 2020, Ripple reported. Total XRP sales by Ripple in Q3 2021, net of purchases, were US$491.74 million in Q2. All XRP sales in Q3 were attributed to the growth and adoption of ODL, Ripple said.
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