The new roadmap that Ripple has set for the XRP Ledger (XRPL) is arriving at a critical juncture. On one hand, the company is positioning XRPL as the foundation for DeFi for institutions.
On one hand, Evernorth, one of the leading XRP treasury management firms, is currently experiencing both the risks and potential rewards of that vision.
DeFi for institutions on XRPL transforms unused XRP into yield-generating capital.
Evernorth holds approximately 473 million XRP and has signaled plans to enter the Nasdaq market under the symbol XRPN. However, recent market conditions have revealed the downsides of such a concentrated treasury strategy.
With XRP trading at around 1.33 USD, data from CoinGecko shows that the asset has dropped nearly 7% in the last 24 hours, resulting in Evernorth having an unrealized loss of about 380 million USD.
This scenario highlights the dilemma that crypto treasury companies face: holding large amounts of assets can amplify profits in a bull market and also exacerbate losses in a bear market.
This is especially true when the infrastructure needed to create added value is still under development.
Ripple's institutional DeFi drive.
Ripple's latest update on the XRPL roadmap indicates that the network is transitioning from a payment-focused blockchain to a more comprehensive financial infrastructure.
Ripple states that these new features are designed to help regulated institutions bring lending, settlement, and liquidity transactions on-chain.
With XRP acting as a bridge asset and a settlement layer alongside new features that include:
Permissioned markets.
Confidential transfers.
Tokenized collateral tools, and
Native lending protocols.
The blog stated that [the ledger is developing into] an end-to-end operating system for real-world finance, with XRP at the center of payments, liquidity, and credit markets. Read the excerpt in the blog.
For the upcoming upgrade, the XRPL lending protocol (XLS-66) is receiving significant attention due to its potential to unlock credit markets on the ledger.
This system is expected to offer liquidity aggregation through Single-Asset Vaults, term-based lending structures, and automated repayment mechanisms.
These features are designed to mirror the traditional credit market while maintaining the transparency and efficiency of blockchain.
Evernorth's big bet on high returns.
For Evernorth, these developments are not just theories. The company has shown its intention to utilize the XRP it holds in the lending ecosystem as soon as the protocol is operational.
Sagar Shah, Chief Business Officer of Evernorth, recently described this project as a major transformation of institutional liquidity operations on-chain. He noted that participating in XRPL's lending infrastructure could create significant yield opportunities for XRP holders and the broader ecosystem.
If the strategy is successful, it will transform these large holdings of XRP from idle reserves into actively income-generating assets, which will help alleviate selling pressure while promoting increased activity within the network.
Operational risks remain.
Although the long-term vision appears promising, there are still many significant uncertainties. The lending protocol needs to be fully operational and supported by validators.
Moreover, the overall success of Ripple's roadmap will depend on whether institutions allocate substantial funding into the XRPL-utilizing market, as mere infrastructure cannot guarantee adoption.
Ultimately, liquidity, regulatory clarity, and real-world usability will determine whether institutional DeFi on XRPL becomes a meaningful sector or merely remains a small-scale experiment.
Future case study of XRP.
Evernorth's current losses, coupled with its commitment to long-term investment in XRPL, are making the company a pioneering test case for Ripple's overall concept.
If lending, privacy features, and permissioned markets attract significant institutional participants, today's treasury losses may be reframed as a proactive positioning in a new financial network.
However, if the implementation fails, the risks of a concentrated treasury management strategy may overshadow the institutional DeFi expectations.
Therefore, the market currently remains between two possibilities:
Short-term volatility on one side.
The vision of an XRP-powered financial infrastructure that remains unproven on the other side.