Driving DeFi & RWAs Through Blockchain Programmability

Transcript

[Music] Good afternoon everyone. I'm Luke Judges, partner director at Ripple and more specifically Ripple X. Ripple X is a business unit that's designed to uh support the open source technology, the XRP ledger, but also create the conditions for builders to really succeed in the ecosystem. Today I want to talk a little bit about programmable in programmable infrastructure and what I think that'll unlock for building with real world assets and DeFi to really unlock the 130 trillion market opportunity.

So today the crypto native uh cryptonative ecosystem is $120 billion of TVL that's mainly driven by use cases such as per uh overlapized lending and even prediction markets. I think that's a fantastic start, but hundred billion dollars growing at 40% KGA is just the start. If we look out and we we zone out a little bit, BCG predict that by 2033, we'll be looking at 19 trillion of assets on chain. So that's over 100, I think it's 150x growth just over the next five, six years. And that's a pretty impressive um growth curve that we're seeing already. We're seeing that with assets like uh tokenized money market funds. We're seeing that with

assets such as bonds and even real estate. So we know there's a lot of growth. But if you zoom out even further, the global credit market and if you look at the financial system as a whole is $130 trillion, which is another 100x. So we've got a thousandx market. This isn't a linear growth curve as well. I know the the pi is a are growing at a it looks relatively small here. This is a rocket ship taking off to the moon, right? We're in the best industry changing traditional finance now. This is one of the biggest opportunities in the market and it's the best place to work. Crypto is here to stay.

But there is a little bit of a problem unlocking some of that uh some of those assets on chain. So I think we specifically have seen this in Ripple for a number of years, right? Ripple started over a decade ago and it was built really to unlock some of those financial use cases such as payments and also some of the native financial primitives that are built directly in the protocol of the XRP ledger and traditional financial rails are rigid. They're not composable but that changes when you want to bring them on chain and we're seeing that already. We we've come across that problem statement. So real world assets when you bring them on chain it becomes a full stack problem.

it becomes a a problem that you need a number of solutions for. So for compliance, you need KYC. For yield, you need onchain smart contracts to generate that yield. For liquidity, you need to be able to aggregate liquidity across I don't know how many Ethereum chains there is today, guys, but I'm sure there's a ton uh maybe a thousand. And you need to be be able to tap into that liquidity across all of these chains very quickly. And you need to be able to settle extremely fast. So we've learned that DeFi needs flexible coordination, not just tokens. It needs structure to unlock trust. It needs to be settled on time and there needs to be terms to unlock that liquidity.

So I'll just quickly give a brief overview because I don't know how many people in this room today are familiar with the XRP ledger ecosystem. Um the XRP as I said was built for financial use cases on day one and it has been for over a decade. It's robust. It has protocol protocol level financial primitives built into the chain from day one such as a DEX, the AMM. There's an upcoming lending protocol all built directly into the chain and accessible by via a set of simple APIs. The block times are fast. It settles in around 3 and a half seconds. Uh it's cheap. It settles for a fraction of a cent and it's secure. It's never been breached in over 13 years now. Now, I think that's pretty impressive considering that the technology was first developed over a decade ago,

but there's problems. Uh, no one can deny that the XPL is not particularly programmatic. And even David Schwarz, our CTO, said he didn't believe that Vitalic would get Turing complete smart contracts working as efficiently as he did. And it was it was impressive even back then. But we're understanding that we're facing some of these challenge. When these assets want to come on chain, they need flexibility. They need liquidity and it needs to be interoperable across these chains. So, how are we solving for that in the XRP ledger ecosystem? We're doing this on a two-pronged approach. We have the XRP ledger mainet which we know and love.

That's obviously our core bread and butter and it runs on XRPL consensus. It uses XRP as a native gas token and it we maintain the Ripple D client. We also have the XPL a number of XPL explorers supporting the ecosystem. The second one which I think is probably more exciting for the audience here is the XRP ledger EVM side chain. Now this released on Monday. I would have loved to reveal it uh on stage here but com team clearly wanted to front run me. Uh it uses the XRP gas tok the XRP asset as a native gas token which brings XRP is 130 billion uh market cap token. It's blue chip. It's highly available across crypto and it brings that with the flexibility of the e Ethereum OS and we

chose to use a Cosmo stack because we believe it unlocks a a high degree of programmability and flexibility. I'll dig in a little bit about what both of these look like and the approaches we're taking now. So, as I said, the Ethereum side chain is now live. I'd like a round of applause, please. We're coming to join you. Thank you. Uh it it mentioned I mentioned it uses the proof of authority consensus. It uses XRP as a gas token and the EVM OS client, but it also has a number of the developer tooling um that you that all of you are used to. So Solidity, Hard Hat, MetaMask support right out of the bat. We have a number of partners that are building with us on

the Ethereum side chain today. with Axel that's unlocking interoperability across 80 plus chains which I think is really important because the XRP ledger is basically been an island and unknown to the rest of crypto for over 13 years and we've also got other interoperability partners coming soon. So wormhole will be next. There may even be more and I think this is sending a message to the market that XRP and the XPL has for long been an island away from the rest of crypto. I think we want to uh come and be a part of and be on the table with you guys and really build for the future of financial institutions and we're positioned very well in the market for that. We've got a number of application partners going live that are crosschain first. So we've got Vertex joining us

which is a per platform. We've got Strobe which is a lending platform and Squid which is aggregating liquidity across a number of chains. If you're a developer infrastructure partners are also really mature. We have grove which is operational on a number of chains to provide RPC endpoints. We have gold sky for indexing data. We have band protocol for oracle services and block scout for our explorer on EVM side chain. As I say, I think this is going to be a really powerful unlock because it brings XRP and the XRPL closer to Ethereum ecosystem and the composability and interoperability that it provides.

So, we're not just stopping there though in terms of programmability. We still believe that the native protocol uh having the functionality and the financial primitives built into the native protocol is important for integration with these financial institutions. They really want to interact with a set of really simple APIs and the WM virtual machine approach that we're doing to expend expand the functionality of our native protocol is really important. We're introducing a new framework spearheaded by my colleague Muka that's called extensions. These extensions enhance the financial primitives that are built into the chain and make them more smart. So they provide a different ability of business logic for the existing protocol features that have been baked in for over a

decade. We're also exploring full true and complete smart contracts on the XRP ledger ecosystem today. So what's first? First of all, we'll be looking at the smart escrow. Uh the escrow service has been around for a long time, but the core primitives baked into the chain are relatively simple. So they're good for time based and conditional payments. The escrow service because it was built for payments use cases, but we think with Rust avail rust availability on the escrow, we can unlock a ton more custom logic unlock different use cases such as options or um a variety of different ways that we can unlock and move money across the ecosystem.

And the escrow is escrow is one option but we're already seeing and attracting builders come to both chains right so we have ono finance who many of you probably know issuing tokenized US treasuries on the XRP ledger fully redeemable with Ripple's RLUSD stable coin so we're building a a aending cycle for liquidity to move and flow freely across both money market funds stable coins and other financial assets also attracted Vertex to build on the EVM side chain where You can use Zaman wallet which is the most popular wallet in the XRP ledger ecosystem to input directly into the EVM side chain and provide liquidity and trade per platforms.

So what's next on the XRP ledger? We have more applications live on the EVM side chain. We're waiting for some of these traditional financial applications. We also anticipate and invite you all to come and build on the EVM side chain. And there's a message that Ripple is here to support builders that want to come and explore the ex XRPL EVM side chain as well as the XRP ledger. I think it's an interesting technology stack that most people haven't explored. I actually came from the Salana ecosystem beforehand. That might be unpopular here, but um I I I really was impressed with the technology considering it's over a decade old, how quick and how fast, how cheap and how secure and how simple it is to interact with the XRP ledger.

We're also exploring native programmability as I said. So that's next. And interoperability. We are really passionate about stopping the XRP ecosystem from being a bridge uh from being an island away from the rest of crypto. We're here to welcome you all into the community. So if you want to come and build on the XRP ledger today, you can scan this QR code and we're here to support you. Thank you very much for your time. Cheers. [Applause] [Music]