Ripple Expands Institutional DeFi Solution Ecosystem

Ripple Labs announced the development of DeFi infrastructure for institutional users, including new liquidity mechanisms, digital identifiers, and lending protocols.

Ripple representatives shared plans to integrate DeFi solutions tailored for institutional users into the XRP Ledger (XRPL) blockchain ecosystem.

The announced innovations include:

1. AMM based on an Order-Book DEX, integrated with a central limit order book (CLOB) to find optimal prices. The new mechanism supports trading tokenized real-world assets (RWA) and stablecoins, ensuring high liquidity.
2. On-chain compliance using decentralized identifiers (DID), enabling user data verification without disclosing personal info for on-chain verification, KYC, and AML procedures. DIDs also lay the foundation for decentralized exchanges (DEX) accessible only to verified users.
3. Blockchain oracles for tokenized assets, leveraging solutions from Band Protocol and DIA to determine the value of stablecoins and RWA tokens for cross-chain operations between various DeFi ecosystems.
4. Multi-Purpose Token (MPT), a new standard for the RWA market that combines the properties of fungible and non-fungible tokens (NFT). This solution is designed for tokenizing bonds, structured financial products, and real-world assets, allowing metadata such as bond expiration dates to be added.
5. On-chain lending products for institutional entities, enabling banks, funds, and FinTech companies to issue and tokenize loans. This solution ensures automated asset distribution, RWA compliance, and the ability to use stablecoins.

Moreover, Ripple outlined several future plans, including the launch of an EVM-compatible sidechain on XRPL in Q2 2025 and enhanced integration with Ripple Payments and corporate DeFi platforms in 2026.

Many of the announced innovations focus on RWA, an area Ripple previously showed interest in. In November 2024, the company launched its first tokenized money market fund on XRPL, regulated under U.K. law.