XRP's Role Within the XRP Ledger (XRPL)

Andrew De'Vilbiss, a crypto enthusiast and on-chain FX liquidity provider, recently emphasized XRP's role within the XRP Ledger (XRPL).

Crypto enthusiasts are buzzing about a recent discussion highlighting XRP’s critical role within the XRP Ledger (XRPL), especially with the growing presence of stablecoins and tokenized assets on the network.

The conversation began with a statement by crypto enthusiast and on-chain FX liquidity provider, Andrew De’Vilbiss.

“XRP is the quote currency of the XRP ledger. This is made possible by the auto-bridge feature. The XRP ledger itself seeks XRP liquidity 1st before it chooses the path finding method. Each transaction cost XRP for gas,” De’Vilbiss explained.

According to him, this mechanism ensures that the XRPL prioritizes XRP liquidity in handling transactions. Moreover, he noted that as more tokenized assets join the ledger and transaction volumes increase, the demand for XRP surges.

“So the liquidity pools quoted to XRP are favoured by the Blockchain. This is the core demand to invest in XRP.”

The Auto-Bridge Feature and Liquidity Flow

A key function of the XRPL is its auto-bridge feature, which ensures XRP acts as an intermediary asset, facilitating optimal trading between different tokens on the network. This integration aims to maximize liquidity efficiency and maintain XRP’s role at the center of XRPL’s financial transactions.

In a video snippet attached to De’Vilbiss’s tweet, David Schwartz, Chief Technology Officer at Ripple (NYSE:PYPL), further elaborated on this aspect.

“The XRP Ledger has features like auto-bridging that kind of put XRP in a central role, providing liquidity between other assets. And the more other assets there are, the more opportunities there are for XRP to bridge between those assets,” Schwartz stated.

#Ripple $XRPXRP is the quote currency of the XRP ledger. This is made possible by the auto bridge feature.

The XRP ledger itself seeks XRP liquidity 1st before it chooses the path finding method . Each transaction cost XRP for gas.

This means the more tokenized assets on… pic.twitter.com/HBbgZXT4jv— Andrew De'Vilbiss (@DrewDeVilbiss) March 16, 2025

“We are on twitter, follow us to connect with us :- @TimesTabloid1 ”

XRP’s Role Amidst the Growth of Stablecoins and Tokenized Assets

With the increasing presence of stablecoins and tokenized assets on the XRPL, questions have arisen regarding XRP’s continued relevance as these new assets take the stage.

Schwartz addressed this point, stating, “It’s not a pivot away from XRP because the XRP is the XRP Ledger’s, like, native token, it’s, it’s gas token. It’s what you pay transaction fees with.”

Even as the network expands, Schwartz highlighted that XRP remains a critical component for transaction fees and liquidity functions within the XRPL’s economic model.

Schwartz also discussed how high-quality stablecoins could strengthen DeFi use cases on XRPL, including lending and real-world asset trading.

“We think it’ll turbocharge some of those DeFi use cases, like lending real, real-world assets. But, the more liquidity we have in the XRP Ledger the more quickly transactions will be confirmed.”

However, he emphasized that XRP’s role remains largely unchanged, especially because of its function as the network’s bridge currency.

The Long-Term Demand for XRP

Both De’Vilbiss and Schwartz touched upon the increasing demand for XRP as the XRPL ecosystem grows. The introduction of more tokenized assets results in greater transaction volumes, which directly translates to higher usage of XRP for fees and liquidity provision.

This dynamic reinforces XRP’s continued importance in the network, making it a key factor in XRPL’s long-term economic model. As the demand for the token grows due to increased activity, it becomes a crucial aspect of the network’s liquidity and efficient operations.