JAKARTA - Ripple, a financial technology company developing the XRP Ledger (XRPL) blockchain, has partnered with Canadian startup providing a layer of Axelar Foundation's interblockchain communications. The goal of this partnership is to improve interoperability in XRPL, focusing on tokenization of real-world assets aka Real World Assets (RWA).
For information only, RWA or real-world assets are physical or non-physical assets that have value in the real world, such as property, art, or stocks. Tokenization is a process of converting ownership rights to assets into digital tokens that can be traded on blockchain. Tokenization can provide benefits such as liquidity, transparency, efficiency, and financial inclusion.
By integrating Axelar's network with XRPL, developers can launch cross-chain decentralized applications (dApps) that can take advantage of XRPL flagship features, such as the original decentralized exchange (DEX), upcoming automated market makers (AMMs), and fast and inexpensive payment systems. In addition, developers can also execute functional calls on smart contracts in more than 55 blockchains connected via Axelar's General Message Passing (GMP).
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Please note, GMP is a technology that allows data exchange and safe instructions between various blockchains without requiring an intermediary or centralized entity. With GMP, developers can easily and safely move conventional assets and real-world asset tokenizations from one blockchain to another.
"This initiative from Axelar will help improve XRPL's interoperability by expanding it to a wider blockchain environmental network while completing XRPL's complete features and opening up new pathways for utility and innovation", said David Schwartz, CTO Ripple and Co-creator XRPL, appreciating Axelar's initiative, quoted from Cryptopotato.
Schwartz also added that real-world asset tokenization will be the driving force of blockchain's economy, and he predicts that the assets will be widely used by traditional loan platforms as collateral.
The partnership between Ripple and Axelar is one of the efforts to improve interoperability in XRPL, previously proposed by Ripple through the XLS-38 proposal. This proposal aims to bridge connections between the mainnet and sidechain in XRPL, including the upcoming EVM sidechain. The Sidechain EVM is a sidechain compatible with the Ethereum Virtual Machine, which can support smart contracts and Ethereum-based applications on XRPL.
XRPL is a blockchain that has been operating for more than a decade, and is known as one of the fastest, cheapest, and most environmentally friendly blockchains in the world. According to a recent report from Messari, network activity at XRPL showed a varying trend in the fourth quarter of 2023.
While active addresses in XRPL decreased by 31.3% compared to the previous quarter, the number of transactions increased by 22.7% over the same period. One of the factors driving the increase in transactions was the surge in the creation of non-fungible tokens (NFTs) by 491% from quarter to quarter, resulting in a total increase in NFT transactions by 170%.
For your information, NFT is a unique and non-exchangeable digital token, which can represent various types of assets, such as art, music, games, or collections. NFT has grown popular on XRPL since the introduction of the XLS-20 standard in 2022, which allows the creation and trading of NFT on XRPL at low cost and high speed.
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