What is Wrapped XRP (wXRP), and how does it work?
Wrapped XRP (wXRP) is a crypto asset pegged to XRP (XRP) and can be used on blockchains other than Ripple’s native XRP Ledger. Ripple is a blockchain-based global payments system providing crypto solutions for businesses, and XRP is the native currency of the Ripple network. Identical in value, its wrapped version, wXRP, can be used in financial payments and settlements on other blockchains.
This article will discuss why we need wXRP, how to buy wXRP, use cases of wXRP, and the purpose and safety of wXRP tokens.
Wrapped cryptocurrencies are tokens that are used as cryptocurrencies on blockchains other than the original blockchain they were built on. The value of wrapped crypto is the same as its original cryptocurrency (1:1). This allows cryptocurrencies like Bitcoin (BTC), Ether (ETH) or XRP to be used on chains other than their native blockchains, thereby increasing their utility.
The purpose of wrapped cryptocurrencies is to help solve the problem of decentralized finance (DeFi) cross-chain liquidity. If each cryptocurrency stays in its own ecosystem, growth is contingent on demand in that ecosystem alone. It would essentially be operating in a closed system.
Wrapped crypto solves this by providing blockchain interoperability among different cryptocurrencies and blockchains. This opens avenues for improving cross-chain liquidity for DeFi ecosystems and boosts crypto asset utility.
Related: Wrapped crypto tokens, explained
XRP is a cryptocurrency that runs on the native XRP Ledger and facilitates transactions on the Ripple Network. One can purchase XRP for financing transactions, investing or exchanging crypto on Ripple. For a transaction involving the use of XRP on any other blockchain than Ripple, Wrapped XRP will be
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