Did you know the XRP Ledger has built in decentralized exchange (DEX) functionality? You do now! It’s been a part of XRPL since 2012. This post and videos cover the projects that utilize it and some upcoming ledger features that will improve them. The first video is mine.
This short video from BankXRP covers the decentralized exchange and a few of its features:
Most assume that smart contracts running automated market makers (AMMs) are required for a DEX, but not on the XRPL
There are newer proposals and projects working to bring smart contracts to the XRP Ledger soon. Liquidity from pools would add greatly to the ecosystem.
Of course, that would be a game changer (if the ledger can handle the increased network usage) There are also efforts to bring automated market makers without smart contracts as well. You can see there are many efforts in many directions to improve everything DEX related on the XRP Ledger.
Here is another highly recommended video from the Tech Circus Youtube Channel. It’s David Schwartz, the Chief Technical Officer of Ripple talking about DeFi and the XRPL DEX.
The XRPL has some unique built-in features related to asset exchange right now:
- Auto-Bridging: When XRP is used to trade between two assets. This is helpful for liquidity problems.
- Pathfinding: Allows for hops between assets to find the best liquidity and price between two assets on the XRPL.
- Federated side-chains: a new feature (not yet released) that will allow coins from other blockchains to live on the XRP Ledger. This will improve on the gateways / bridges that have been used recently. Bridges across various chains have been vulnerable to hacks. They seem to not be a great answer.
- Order books: The downside of XRPL DEXs right now is that trades are driven by an order book system. Like I said, developers are working to bring automated market makers and liquidity pools which will improve the trading experience.
List of DEXs Using the XRP Ledger
There are a few DEXs already live on the XRP Ledger. They are part of the ever expanding decentralized trading movement. Every major chain has multiple DEXs and the space grows every day. I see these apps (along with tokenized traditional assets) as the future of DeFi.
So finally, here is my list of XRPL DEXs and a blurb about each one. I go over them quickly in the video above. I kept to DEXs that are live and working (as of July 2022). Be sure to check on the liquidity in their networks before you use them. Also, research how to use them and reviews from traders.
XUMM
XUMM is a non-custodial wallet and suite of apps that run on the XRP Ledger. Most of these other decentralized exchanges also integrate with XUMM. XRP Toolkit is one that offers DEX functions.
Gatehub is also a new way to trade and interact with the XRPL through XUMM. Their liquidity might not be as good as Sologenic, though. XUMM integrates with most of the XRPL DEXs and provides great developer tools.
Sologenic (SOLO, CORE)
Sologenic is an ambitious XRPL DEX that is aiming to allow trading of a variety of crypto (not just XRPL coins) against tokenized traditional assets. These are things such as stocks, funds, bonds, commodities, and others that are locked up and represented on the chain.
SOLO will be running on the Binance’s BNB Chain in parallel. They are also building their own layer 1 blockchain called Coreum (CORE) as well. This will operate with the Cosmos Network through Tendermint and allow for smart contracts to be written in WASM.
XRPL Coins
In addition to being a useful XRP Ledger coin explorer, they have their own DEX too. Their user interface is great and it seems to be popular.
On XRP
On XRP has a DEX that is part of their website. They have a lot of stuff going on including education and NFTs.
XRDoge DEX
Yes, XRDoge has a DEX. It’s not just a copy of a meme coin! This DEX is low quality in my view. I would avoid it since the quality of Sologenic XRPL Coins is so high.
To conclude, I like the progress and approach that XRPL developers are taking. Their ledger is already fast, inexpensive, and energy efficient. It just needs better liquidity and might really blast off if Sologenic pulls off Coreum and tokenized assets.
If the Sologenic team can pull off their vision by the end of 2022, there will be huge value added. If the AMMs can be integrated well, the functionality and liquidity of the XRPL DEX will be among the best in DeFi.