This is an excerpt from the Empire newsletter. To read full editions, subscribe.
If a thriving blockchain ecosystem were a recipe, the ingredients would look something like this:
- One consensus mechanism
- Four DeFi apps*
- Driven founder/figurehead
- One native stablecoin (minimum)
- Two legal entities (dev-studio and foundation)
- One token bridge (minimum)
- Three terminally online responders, guys.
The secret sauce may be one or more of the following: funding rounds, mid-cap memcoins, NFT collections, active venture capital funds, and third-party validator clients.
*Minimum required DeFi applications: DEX with token launchpads, lending/collateralized debt, liquid staking, oracle.
So, while there are now hundreds of smart contract platforms with half-decent market capitalizations, not all of them are as successful as the main platforms – Ethereum, Solana and BNB.
Case in point: XRPL, which has nearly $63 million worth of TVL in its online applications. Ripple Labs is now hard at work completing its own recipe, more than 12 years after its launch.
Let’s start simple: XRPL does have a consensus mechanism, albeit without conventional staking or mining, instead relying on trusted validators. And it already has several token bridges.
There are also two legal entities: Ripple Labs, headquartered in San Francisco, and the Estonian non-profit XRP Ledger Foundation, which was recently renamed the Inclusive Financial Technology Foundation.
Ripple Labs CEO Brad Garlinghouse clearly fits the criteria of a driven founder and figurehead.
As for the guys answering questions, David Schwartz, longtime CTO of Ripple Labs, has gained a following thanks to his solid answering energy (check).
And anyone who’s ever tweeted anything remotely related to criticism has probably been visited by an XRP army that together truly harnesses the power of much more than just two guys responding (check, check).
That leaves four DeFi applications and its own stablecoin.
XRPL currently has four DeFi apps with 100 unique active wallets interacting with them daily, but three of them are DEXs and one is an NFT marketplace. As of last month, he had his own oracle, which should help attract builders.
And conveniently, XRPL is an exception to the rule (without directly staking XRP as part of the consensus), so it can do without anyway liquid betting app.
The only ingredients then left were a vibrant lending protocol and its own stablecoin.
Luckily, a stablecoin is on the way: Ripple USD (RLUSD), which the New York State Department of Financial Services has just approved for supply.
It will be structured similarly to USDT Circle and USDT Tether, backed by cash and cash equivalents (primarily short-term US Treasuries).
With XRPL so close to acquiring all the necessary ingredients to become truly popular, it’s no surprise that DeFi veteran Robert Leshner is now open to supporting Ripple ecosystem-building projects through his fund (get bonus VC points!).
In this case, the basis of resistance for XRPL will be the list of its own mid-cap memcoins, which is the traditional tariff.
Like it or not, they are coming too, although the biggest one is the army-themed XRP coin, with a market cap of $45 million (still too small).
On the plus side, only $15 million worth of tokens were sold on XRPL in the past day. If RLUSD finds decent support, watch for that number to only increase to complete the recipe.
Bellisimo!
