How XRP benefits from XRPL, as per Ripple’s CTO

• The XRP ledger helps to add liquidity to the XRP token
• XRP was struggling to improve user adoption

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.

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Connection of the Ripple projects

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.

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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.

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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On the other hand, the total number of XRP trustlines created has also been following a downward trend. The decline in the metric suggests that only a few users were involved in issuing new assets on the ledger. Furthermore, these users were not willing to hold.

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In connection with the network growth, Santiment revealed that XRP growth had been hindered. The network growth shows the number of new addresses being created daily on a network. Since the metric fell to 328, it meant that XRP was losing traction, and user adoption was at a much slower pace.

How much are 1,10,100 XRPs worth today?

For holders of the token, it hasn’t been very profitable sticking to XRP in the last few days. This was because the ratio of daily on-chain transaction volume in profit to loss was 0.784. The outcome of this metric implies that transactions that have passed through the Ripple network have ended in losses than gains recently.

Source: Santiment

On 8 April, Schwartz also explained that a lot of technologies do not work with XRP like the XRPL. Adding that migration to the Ripple network could be challenging, he tweeted,

“Because there are lots of technologies that don’t work with XRP. And people who use those technologies will have a much harder time migrating to XRP.”