If all goes according to plan, Wrapped XRP (wXRP) will come to the Ethereum (ETH) blockchain next month, courtesy of Wrapped.com. The move aims to enable XRP holders to interact with aspects of decentralized finance, or DeFi, such as implementing smart contracts for use in borrowing and lending, and swapping for alternative currencies, via their tokens. Currently, the network can only handle sending, receiving and holding XRP.
Encapsulated tokens are digital currencies that are stored in a digital vault and run on a separate blockchain. The wrapped tokens include Wrapped Bitcoin, which runs on the Ethereum blockchain, and Wrapped Ethereum, which converts ETH into the ERC-20 standard. wXRP will have a 1:1 exchange ratio with XRP, with custodianship provided by the Hex Trust.
In a tweet published earlier this week, David Schwartz, chief technology officer of Ripple, claimed that wXRP will be “multi-chain.” While Ethereum remains the preferred blockchain for launching encapsulated tokens, high gas fees have caused some controversy among crypto enthusiasts. According to Ycharts.com, the average gas price per Ethereum smart contract execution has risen to $184. Multi-chain integration can enable users to encapsulate XRP with chains with much lower gas prices.
XRP Encapsulated Coming to Ethereum! Great news for those who want to access XRP within Ethereum wallets, DeFi and smart contracts.
It’s multi-chain after all. https://t.co/36shyqF0Nj
– (JoelKatz) November 1, 2021
Ripple Labs is seeking to disrupt established financial institutions, such as the Association for Global Interbank Financial Telecommunication, with lower fees and faster settlement times. To do this, the company created its own platform for enterprises, RippleNet, to facilitate cross-border fund transfers. However, transactions are not made in XRP, and the coin is used only to provide liquidity.
Last December, the US Securities and Exchange Commission (SEC) commissioned Ripple and two of its executives to conduct $1.3 billion in unregistered securities offerings by selling XRP to investors between 2010 and 2019. Ripple’s legal team has no Plan for it Settlement With the Securities and Exchange Commission, he is confident that the regulator’s head, Gary Gensler, will drop the ongoing lawsuit.