XRP Ledger Is Establishing Itself as the Infrastructure Layer for Institutional DeFi

In a comprehensive post on X, crypto advocate Max Avery described how the XRP Ledger (XRPL) is gaining traction as the infrastructure layer for institutional decentralized finance (DeFi). Avery provided a detailed breakdown of the features and capabilities that draw major financial institutions to the XRPL. His remarks focused on how XRPL addresses specific requirements institutions face around compliance, settlement speed, and liquidity management—issues that many other blockchain networks still struggle to resolve. Avery stated that traditional finance is increasingly shifting toward on-chain systems and that the market for tokenized assets has already entered the trillions. However, he noted that many blockchain platforms continue to fall short when it comes to institutional expectations. In contrast, Avery argued that the XRPL was built with institutional-grade finance in mind and is now proving itself by supporting real-world applications. He highlighted that the ledger has processed billions of transactions already. The XRP Ledger is establishing itself as the infrastructure layer for institutional DeFi. Let’s unpack why major financial players are increasingly choosing the XRPL 1/23 pic.twitter.com/zqfkU11vSK — Max Avery (@realMaxAvery) May 23, 2025 Advanced Trading Mechanics and Regulatory Tools One of the most significant features Avery discussed is the XRPL’s Automated Market Maker (AMM) , which merges the functions of order books and liquidity pools. According to Avery, this integration removes the need for institutions to choose between a decentralized exchange (DEX) and an AMM, as the XRPL automatically identifies optimal pricing using both mechanisms in tandem. He also explained the importance of the Clawback function, which allows issuers to reverse transactions in specific cases, such as stolen funds or compromised accounts. Avery was careful to note that this is not about centralization, but about meeting fraud-prevention and compliance standards that are mandatory in traditional finance. We are on twitter, follow us to connect with us :- @TimesTabloid1 — TimesTabloid (@TimesTabloid1) July 15, 2023 Security, Identity, and Real-Time Data Integration Another major development Avery pointed to is the launch of Decentralized Identity (DID) on the XRPL . He said this technology enables identity verification without centralized storage, allowing institutions to confirm credentials without accessing full personal details. He added that embedded price oracles, provided by Band Protocol and DIA, supply the XRPL with real-time market data. This allows tokenized assets like real estate to remain aligned with dynamic market values without requiring third-party services. Avery also mentioned the forthcoming Permissioned DEX feature, which will give institutions the ability to operate private markets on-chain while maintaining decentralization. Only verified participants would be allowed access, yet no centralized authority would control the system. He also addressed the implementation of Multi-Purpose Tokens (MPTs), a feature that enables more efficient management of complex financial instruments such as bonds, which may differ in maturity but remain fungible while carrying unique metadata. Institutional Lending, Smart Contracts, and EVM Compatibility He elaborated on a new lending protocol under development that will support uncollateralized loans issued on-chain, with underwriting conducted off-chain. Avery emphasized that this design retains institutional risk frameworks by including provisions like first-loss capital. He also noted that the XRPL’s development approach avoids unnecessary overhaul by allowing extensions to existing functionality. Smart Escrows were expected in Q3 2023, and broader smart contract support is projected by the end of the year. Additionally, he referred to the XRPL’s EVM-compatible sidechain, which enables Solidity developers to bring Ethereum-based code to the XRPL ecosystem. Delivering Institutional Utility in Production, Not Theory Avery then listed several reasons institutions favor XRPL, including built-in compliance, transaction finality within 3–5 seconds, extremely low transaction fees, and the absence of gas bidding wars. He added that the XRPL provides legal clarity and includes an integrated DEX . According to Avery, these features collectively solve the three primary institutional concerns with DeFi: compliance risk, technical limitations, and unclear regulatory frameworks. He emphasized that XRPL is not a theoretical platform. He said, “Most ‘institutional-grade’ platforms are theoretical while the XRPL already has major financial institutions building real applications.” He specifically named SBI, Santander, and Standard Chartered as entities deploying solutions on the XRPL. Avery also underlined that the tokenized treasury market is expanding rapidly and requires blockchain infrastructure that complies with financial regulations. He said the XRPL’s AMM and Clawback features provide the necessary capabilities to support this growth. Avery added that the XRPL’s credentials framework allows institutions to conduct KYC checks without compromising individual privacy. Also, its AMM functionality ensures steady liquidity for a wide range of tokenized assets, including real estate, commodities, and bonds. He further explained that integrated oracles allow the XRPL to maintain consistent asset pricing across networks, reducing inefficiencies caused by arbitrage. Rounding up his tweet, Avery argued that institutional DeFi on the XRPL is not attempting to replace traditional systems but is instead creating a bridge between legacy financial infrastructure and blockchain-based operations. He reminded readers that the XRPL has supported institutional-grade applications for over ten years, and what is occurring now is the natural continuation of that trajectory. Disclaimer : This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses. 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