The decentralized finance (DeFi) sector has been dominated by Ethereum (ETH) and Solana (SOL), but XRP may soon disrupt the status quo. According to All Things XRP, a prominent XRP community member, the XRP Ledger (XRPL) has the potential to outpace its competitors in DeFi. Ethereum’s high gas fees, ranging from $20 to $70 per transaction, have driven users to seek more cost-effective alternatives. Meanwhile, Solana, though cheaper and faster, has struggled with network outages and perceived centralization risks. In contrast, XRPL offers rapid transaction speeds of 3 to 5 seconds with negligible fees, making it an attractive option for DeFi enthusiasts.
⚠️🚨 ETHEREUM’S TOO EXPENSIVE. SOLANA’S TOO UNSTABLE.
— All Things XRP (@XRP_investing) May 10, 2025
But XRP might be DeFi’s next dark horse.
Let me explain why XRPL could win this race. 🧵👇 pic.twitter.com/e9cNmDQUGV
Hooks: The Game-Changer for XRPL in DeFi
All Things XRP highlights that the introduction of Hooks, a programmable feature on the XRPL, could be a game-changer for DeFi. Unlike traditional smart contracts, Hooks are lightweight, ensuring security, efficiency, and simplicity. This feature enables decentralized lending, yield farming, and automated payments with minimal costs and faster processing. Even before the full deployment of Hooks, XRPL has gained traction in DeFi. CryptoTradingFund, a project built on XRPL, successfully processed $2.23 million in transactions during its beta phase, demonstrating the ledger’s DeFi capabilities.
Institutional Support and Global Reach
XRP’s DeFi push is further bolstered by strong institutional backing. SBI Holdings has integrated Ripple’s technology for cross-border payments, and XRPL is gaining regulatory support in key markets such as the UAE and the EU. Additionally, Ripple’s stablecoin RLUSD and the proposed XRP ETF underscore its DeFi ambitions.
Meanwhile, the recent launch of the “Deep Freeze” compliance toolset aims to enhance security and attract institutional investors to the XRPL ecosystem. With these advancements, XRP appears poised to position itself as a formidable DeFi contender, potentially outshining Ethereum and Solana in the long run.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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