Ripple USD Launch Sparks Controversy Amid XRPL Limitations

Ripple’s anticipated launch of Ripple USD (RLUSD), a stablecoin pegged to the U.S. dollar, has generated excitement within the community, as it was initially expected to debut this year. Ripple planned to launch RLUSD on both the XRP Ledger (XRPL) and Ethereum. However, recent developments indicate a shift in plans.

Launch Exclusivity on Ethereum

Recent reports suggest that RLUSD may only launch on Ethereum this year. While there is still a possibility for it to launch on XRPL, it will lack initial functionality in the Automated Market Maker (AMM). Instead, it will be confined to the decentralized exchange (DEX) order book.

A significant reason for this limitation arises from the clawback feature. This feature restricts the use of the stablecoin within XRPL’s AMM. Fortunately, developers are working on amendments that could address these issues. Notably, the XLS-73 amendment aims to enhance how the AMM interacts with frozen assets, while XLS-77 focuses on enforcing stricter freeze protocols for trustlines, preventing blacklisted accounts from transferring RLUSD.

Uncertainty Surrounding Implementation

Given that XRPL operates as a decentralized network, the timeline for implementing these amendments remains uncertain. Additionally, community members have expressed feelings of fatigue regarding the ongoing developments.

Ripple CTO David Schwartz shared insights on XLS-77, clarifying that it introduces a less severe freeze than some might anticipate. In cases where XLS-77 is applicable, assets do not transfer to frozen accounts; instead, they stay in unfrozen accounts with new restrictions that affect payments that would have otherwise been processed.

FWIW, I'm not sure I like the description of XLS-77 as a "deeper" freeze. If anything, it's less deep. Unless I'm missing something, in any case where XLS-77 makes a difference, an asset that would have been frozen is, instead, not frozen.
— David "JoelKatz" Schwartz (@JoelKatz) September 30, 2024

Despite these technical advancements, the launch of RLUSD may not fully meet community expectations right away. A high-quality stablecoin is crucial for Ripple’s long-term success; however, users may need to exercise patience as the initial release might lack complete functionality. The XRP community has reacted strongly to the news of RLUSD’s potential limitations on XRPL.

Many feel frustrated, especially since the stablecoin is expected to operate fully on Ethereum. This sentiment has led to heightened tensions within the community, particularly towards Ethereum and its creator, Vitalik Buterin.

Disclaimer: The information in this article should not be considered financial advice, and FXCryptoNews articles are intended only to provide educational and general information. Please consult with a financial advisor before making any investment decisions.