Analysis of the Expansion of Ripple’s RLUSD Stablecoin on Ethereum
Ripple’s RLUSD stablecoin is experiencing significant growth on the Ethereum blockchain, as opposed to its native XRP Ledger (XRPL). This report examines the factors contributing to this trend and evaluates the implications for Ripple’s market positioning.
Current State of RLUSD Supply
Recent data from *CryptoSlate* indicates that RLUSD’s total circulating supply has escalated to $1.26 billion within a mere twelve months of its inception. Notably, approximately $1.03 billion—representing 82% of the total supply—exists on Ethereum, while the remaining $235 million is allocated on XRPL. Such statistics underscore a marked preference within the market for Ethereum’s enhanced liquidity and composability relative to XRPL’s architecture, which is more attuned to regulatory compliance.
Drivers of RLUSD’s Growth on Ethereum
The primary catalyst for this pronounced disparity lies in the relative maturity of the financial infrastructure underpinning each blockchain.
The Advantages of Ethereum’s Financial Ecosystem
– **Established Dollar Liquidity**: RLUSD’s deployment onto Ethereum allows it to tap into an already entrenched ecosystem characterized by robust dollar liquidity.
– **Leading Total Value Locked (TVL)**: Data from DeFiLlama reveals that Ethereum consistently leads all blockchains in terms of TVL and stablecoin supply, thus providing a conducive environment for new assets.
– **Integration with Major DeFi Protocols**: The seamless integration of RLUSD with established decentralized finance (DeFi) protocols such as Aave, Curve, and Uniswap facilitates immediate access to existing routing engines, collateral frameworks, and risk models.
The liquidity pool for USDC/RLUSD on Curve, which currently holds around $74 million, affirms this trend by positioning itself among the larger stablecoin pools on the platform. For institutional treasuries, market makers, and arbitrage desks, such depth is crucial for executing low-slippage trades in substantial volumes, facilitating basis trades and yield-farming strategies that drive contemporary crypto capital markets.
Conversely, XRPL is still in the formative stages of developing a robust DeFi foundation. Its automated market maker (AMM) was only operationalized in 2024, resulting in RLUSD-related pools on XRPL suffering from limited liquidity and insufficient follow-through.
Furthermore, XRPL’s AMM design has yet to attract the level of liquidity provider participation seen within Ethereum’s ecosystem. Consequently, a dollar of RLUSD deployed on XRPL encounters markedly fewer opportunities for swaps, leverage, or yield generation when contrasted with its deployment on Ethereum.
User Engagement with RLUSD on Ethereum
Despite potential criticisms positing that RLUSD’s supply on Ethereum may merely reflect “vanity metrics,” a thorough examination of on-chain transfer data reveals a substantive product-market fit characterized by high transaction velocity and recurrent usage.
According to Token Terminal, weekly transfer volumes of RLUSD on Ethereum have surged to approximately $1.0 billion, a staggering increase from an average of $66 million earlier in the year. This trend reflects a structural shift with an upward trajectory through the first half of 2025 and a re-basing to a significantly elevated floor in subsequent months.
Key observations include:
– **High Transaction Frequency**: The weekly transaction count has escalated to approximately 7,000 from just 240 at the beginning of January.
– **Broadened Market Participation**: The concurrent rise in both volume and transaction counts suggests enhanced participation beyond a concentration among large holders.
– **Healthy Holder Distribution**: Data from Etherscan indicates that RLUSD has garnered around 6,400 distinct holders on Ethereum as of late November 2025, an increase from 750 at the year’s outset.
This increasing holder count and transaction frequency serve as indicators of robust health within the network.
Structural Friction Between RLUSD and XRPL
The divergent structural characteristics between Ethereum and XRPL elucidate why organic growth has favored Ethereum. On Ethereum, RLUSD operates as a standard ERC-20 token. The compatibility with wallets, custodians, accounting middleware, and DeFi aggregators optimizes its functionality.
In contrast, XRPL’s design imposes considerable friction on users seeking to hold RLUSD:
– **Reserve Requirements**: Users must maintain an XRP balance to satisfy reserve conditions.
– **Trustline Configurations**: Establishing specific trustlines to the issuer is mandatory; this process may discourage potential users.
– **Access Limitations**: If the issuer employs the `RequireAuth` setting for strict compliance control, accounts must be explicitly allow-listed before receiving tokens.
While Ripple asserts that these features cater to banks requiring stringent control mechanisms, they simultaneously hinder organic adoption. In an environment where capital tends towards frictionless pathways, these operational burdens render XRPL less competitive in high-frequency trading contexts typical within DeFi ecosystems.
Future Trajectory for RLUSD
Despite the current imbalance favoring Ethereum, Ripple’s overall trajectory positions it favorably within the competitive landscape of stablecoin issuers. Token Terminal projects that if RLUSD’s market capitalization were to multiply tenfold from its current levels, Ripple would solidify its status as the third-largest stablecoin issuer globally—trailing only Tether and Circle.
Moving forward:
– **Projected Growth**: A base-case projection anticipates an increase in RLUSD’s Ethereum supply from approximately $1.0 billion to between $1.4 billion and $1.7 billion over the next six months. This scenario presupposes that Curve liquidity remains within a range of $60 million to $100 million while demand from centralized exchanges (CEX) and over-the-counter (OTC) markets continues its upward trajectory.
– **XRPL Liquidity Enhancement**: Although XRPL could witness incremental liquidity accumulation over time, it is likely to remain a minor fraction of total issuance unless significant interventions are made.
An aggressive strategy focusing on multi-month AMM reward initiatives could potentially accelerate liquidity growth on XRPL; however, if Ethereum continues solidifying its lead—especially if liquidity in Curve’s USDC/RLUSD pool exceeds $150 million—the inherent network effects may become increasingly difficult for XRPL to overcome.
In conclusion, Ripple finds itself confronting a paradox: its aspirations for becoming a leading stablecoin issuer are intricately tied to leveraging the infrastructure provided by its primary competitor—Ethereum.
