The XRP community has been excited with the prospect of the RLUSD stablecoin potentially impacting the trajectory of XRP. In fact, pundits have speculated that its introduction into the market will spur XRP’s price beyond imagination.
This expectation is not far from reality since RLUSD is supposedly going to help improve XRP’s use case. However, experts have warned against too much expectations and pointed out that the launch might not catalyze XRP’s surge, at least not in the short term.
When the Real XRP Pump Will Happen
In a lengthy post on X (formerly Twitter), Vincent Van Code, a software engineer and entrepreneur, commented on the current impact of Ripple’s stablecoin approval on XRP. He noted how the development pushed XRP’s price from $1.90 to $2.35, however, referring to it as a “speculative pump.”
Read Also: Why RLUSD Matters for Ripple and the Future of Finance
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Van Code pointed out that the surge was not driven by any fundamentals, rather, it happened based on excitement. He stressed that the real pump will happen when Automated Market Markers (AMM) and Liquidity Pool (LP) are fully set up, and users realize that they can earn a 5% annual percentage yield on-chain with no counterparty risk.
When this happens, Van Code speculates that crypto exchanges would move to take advantage of the opportunity by providing RLUSD staking and making a profit by directly locking XRP on the XRP Ledger. He notes that it is at this point that “serious money will flow into the XRPL.”
Additionally, he guessed that people would begin to swap USDT for RLUSD and move it to cold wallets. This, in turn, would allow them to purchase XRP using RLUSD on decentralized exchanges. Ultimately, he opined that this activity would increase XRP’s demand as liquidity on centralized exchanges reduces. Van Code speculates that all this could happen by February 2025.
XRPL Validator Offers Contrasting View
Meanwhile, an XRPL validator, Vet, countered the points made by Van Code. He raised several concerns and possible obstacles and limitations to this expectation. The first point he made was that RLUSD cannot be put into AMM at the moment.
Secondly, he pointed out that there are no guarantees of any specific yield earnings in an AMM pool with RLUSD. Moreover, Vet emphasized the impermanent loss risk associated with AMMs. He stressed that “there will never be an AMM pool on the XRPL with no counterparty risk.”
Ultimately, Vet pointed out that the XRP Ledger does not offer any staking features and that staking on exchanges is counterparty taxed.
XRP Movement
XRP has not experienced any notable price action in the last 24 hours. At the time of writing, its price spiked by 1.29% to trade at $2.42. As previously mentioned, XRP jumped from $1.9 on Tuesday to regain the $2.4 mark following the approval of RLUSD.
Source: CoinMarketCap
Since then, its price has mostly consolidated between $2.3 and $2.47. However, it is noteworthy to mention the decline in XRP’s trading volume. According to on-chain data, its total trade over the last day dipped by 1.33% to $11.8 billion, with a live market cap of $138 billion. Ultimately, XRP now positions as the fourth most valuable cryptocurrency after Bitcoin (BTC), and Ethereum (ETH).
Read Also: ChatGPT Predicted THESE XRP Price Targets for December 31
Victor Swaezy
Victor Swaezy is a crypto-journalist with more than 3 years of experience in covering blockchain technology and digital currencies news. Known for his comprehensive reporting, Victor has contributed to leading industry publications such as Coinfomania and Crypto News Guru, providing market participants with the required knowledge to make informed decisions. When he is not working, he loves to watch movies and have a good time.