On October 29, 2021, Wrapped.com made an exciting announcement, revealing their official support for Wrapped XRP (wXRP) on the Ethereum blockchain. This collaboration with Hex Trust, a leading digital asset custodian in Asia, empowers users to utilize wXRP, a token backed 1:1 by XRP, within the Ethereum DeFi ecosystem.
Mason Borda, CEO of Tokensoft, Inc., the driving force behind Wrapped, highlighted that this newfound connectivity would grant XRP users access to various DeFi applications. Unlike the native XRP token, wXRP opens doors for borrowing, lending, swapping, and automated market maker (AMM) functions within the Ethereum DeFi space.
David Schwartz, Ripple’s CTO, further emphasized the multichain capabilities of wXRP in a tweet at the beginning of November. While Ethereum currently serves as the primary blockchain for launching wrapped cryptocurrencies, its well-known high gas fees have sparked controversy among users and crypto enthusiasts. During congestion periods, gas prices can skyrocket to hundreds of dollars for smart contract executions. This stands in stark contrast to the nearly zero transaction fees on the XRPL. By integrating with multiple chains, users might have the option to wrap their XRP on networks with significantly lower gas prices, addressing the concerns associated with high fees on Ethereum.
SushiSwap Yield Farming: Exploring Wrapped XRP and Investment Opportunities
One aspect that may have been overlooked with the wrapped XRP (wXRP) launch on Ethereum is the exciting world of yield farms and liquidity pools. Among them, the wXRP/USDC farm on SushiSwap caught attention. Initially, it showed great promise with an Annual Percentage Yield (APY) of 520% and a Total Value Locked (TVL) of around $250,000 in December. However, as with many things that seem too good to be true, the reality has changed over time. The current APY stands at 5.26%, with a TVL of $869,000.
Although the rewards from this yield farm are not paid out in XRP itself, they are given in SUSHI and WRAP tokens. For XRP holders, who often have limited staking or interest-bearing options for their tokens, these yield farms present intriguing investment opportunities with relatively low risk.
Wrapped Cryptocurrency: Unlocking Cross-Chain Interoperability
The biggest challenge in achieving blockchain interoperability lies in the multitude of blockchains, each speaking its own unique “language.” These complex ecosystems vary in terms of smart contract usage, transaction schemes, and consensus models, making their connection highly intricate.
To address the underlying issues of cross-chain interoperability, universal communication between different blockchains is essential. Open protocols and multichain frameworks have emerged as potential solutions to these challenges.
Wrapped XRP and similar wrapped cryptocurrencies represent a significant step towards cross-chain interoperability. They enable users to spend tokens native to one blockchain on another, fostering greater connectivity. The ultimate goal is achieving full interoperability between blockchains, opening the door to countless new use cases and real-life applications. As the technology continues to evolve, the potential for innovation and collaboration across blockchains becomes even more promising.