Ripple and Axelar Join Forces to Advance Interoperability and Tokenization, Poised to Drive Future Crypto Market
Summary:
Ripple is teaming up with Axelar Foundation to enhance its XRP Ledger with interoperability, laying the groundwork for future real-world asset (RWA) tokenization. The collaboration will allow smart contract operations across numerous blockchains, facilitating cross-chain decentralized applications. The integration predicts increased liquidity for stablecoins and large-cap assets. Growing blockchain adoption is anticipated, and tokenization—turning asset rights into digital tokens—may become the next major application in crypto, with the market predicted to hit up to $5 trillion by 2030.
Ripple is joining forces with the Axelar Foundation to infuse its XRP Ledger (XRPL) blockchain with interoperability, setting the pace for the future progression of real-world asset (RWA) tokenization. This collaboration will allow developers to make use of Axelar's General Message Passing (GMP) to trigger operations on smart contracts located on more than 55 blockchains. This will facilitate the distribution of decentralized applications across various chains via XRPL, Ripple's transparent, publicly owned blockchain.
The integration is expected to facilitate liquidity for large-cap assets and stablecoins, according to both companies. Ripple's chief technology officer and XRPL co-creator, David Schwartz, has informed Cointelegraph that tokenizing real-life assets such as real estate, commodities, treasuries, and bonds is set to be the propelling force for the blockchain economy. Schwartz anticipates an increasing reliance on tokenized RWAs for secured loans by traditional lending platforms.
Active for over a decade now, XRPL has reported a daily activity volume growth of 8.8% in 2023, as mentioned in a recent Messari report. The recorded increase was attributed to different kinds of transactions, including an impressive 73.7% rise in nonfungible tokens activity. Meanwhile, Axelar, a Canadian startup established in 2020 by Algorand's founding team and MIT graduates, provides an intercommunication overlay between blockchains. This allows for data sharing across networks without needing mediators or centralized entities.
Schwartz believes that the incorporation of Axelar will help expand blockchain prevalence by enabling RWA. Tokenization refers to the conversion of asset rights into blockchain-based digital tokens. Tokens can represent physical assets like real estate, a piece of art, or company shares, simplifying their purchase, sale, and exchange processes.
Investment banking entity, Citi, has forecasted that RWA tokenization could potentially become the next big thing in the crypto world, with market predictions reaching between $4 trillion and $5 trillion by 2030. It has been projected that the growth will mainly stem from the tokenization of real estate, private equity, and debt markets, with private equity gaining the highest prominence as a tokenized asset class due to its advantages for liquidity and fractionalization.
Published At
2/27/2024 5:00:00 PM
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