Ripple CTO: XRP Demand Rises With Tokenized Assets On XRPL

Ripple’s Chief Technology Officer, David Schwartz, recently emphasized the pivotal role of XRP within the XRP Ledger (XRPL). According to Schwartz, XRP serves as the primary liquidity provider between various digital assets on the network. This function is facilitated by the XRPL’s auto-bridge feature, which ensures that XRP is prioritized for liquidity before determining the transaction path.

Schwartz explained that as more tokenized assets are introduced onto the ledger, the demand for XRP increases. This is because each transaction on the XRPL requires XRP for gas fees, and higher transaction volumes lead to more fee generation. Consequently, liquidity pools quoted in XRP are favored by the blockchain, creating a core demand for investing in XRP.

The auto-bridge feature of the XRPL is designed to optimize trading between different tokens by using XRP as an intermediary asset. This mechanism enhances liquidity efficiency and maintains XRP’s central role in the network’s financial transactions. Schwartz noted that the more diverse the assets on the XRPL, the more opportunities there are for XRP to act as a bridge between them.

Addressing concerns about the relevance of XRP amidst the growth of stablecoins and tokenized assets, Schwartz clarified that XRP remains essential for transaction fees and liquidity functions. He stated that even as the network expands, XRP’s role as the native token and gas token of the XRPL ensures its continued importance. Schwartz also highlighted that high-quality stablecoins could strengthen decentralized finance (DeFi) use cases on the XRPL, such as lending and real-world asset trading, without diminishing XRP’s role.

Both Schwartz and Andrew De’Vilbiss, a crypto enthusiast and on-chain FX liquidity provider, underscored the long-term demand for XRP. As the XRPL ecosystem grows and more tokenized assets are introduced, the transaction volumes increase, leading to higher usage of XRP for fees and liquidity provision. This dynamic reinforces XRP’s importance in the network, making it a key factor in the XRPL’s long-term economic model.