XRPL Takes Institutional Leap With Credentials, Domains, and Permissioned DEX

• After permissioned domains went live on the XRP Ledger (XRPL), Permissioned DEX has achieved consensus from validators to launch in the next two weeks.
• RippleX says that it will soon provide the entire permissioning stack to institutional users for regulated access to liquidity pools on XRPL.

On Wednesday, the XRP Ledger (XRPL) activated Permissioned Domains as part of XLS-80, with 91% of the validators in support, as we reported. Next comes the Permissioned DEX, which core developers at RippleX say has received the required support and will launch within the next two weeks.

As CNF detailed, Permissioned Domains provide a new access layer to the XRP Ledger. Since its guarded by credential requirements, organizations can restrict participation to users based on their preset conditions and compliance rules. However, they would still be able to use the public ledger for transaction finality.

Now, the developers are working on the Permissioned DEXes. These are controlled decentralized trading environments where a permissioned domain can control access to the platform. This allows regulated businesses to engage in fast and efficient decentralized trading with counterparties, while ensuring all participants have been properly vetted.

Permissioned DEXes are mostly similar to the other decentralized exchanges on XRPL. Traders can choose to place open offers that can be filled by any other trader. However, unlike the normal exchanges, permissioned DEXes allow users to place permissioned offers, which can only be filled by the permissioned domain with a matching ID. This order is separate from those on the open DEX. Hybrid offers are also restricted to permissioned domains, but can be filled on both the specified DEX and the open DEX.

XRPL’s Permissioning Stack Boosts Privacy for Institutions

With the permissioned DEX, XRPL will edge closer to the era of the permissioning stack and full privacy, which CEO Brad Garlinghouse has described as the final step of XRP’s institutional adoption. The stack is based on onchain credentials, through which a wallet address can prove that it meets conditions like KYC and accreditation.

The XRP Ledger is not involved in deciding who can get the credentials. It just verifies wallets that have them and grants them access. Permissioned domains and permissioned DEXes are the next level, allowing institutions to dictate who can access their platforms.

The most critical part is that the XRP Ledger enforces all the rules at the protocol level and there are no workarounds.

XRP trades at $1.28, shedding 17% in the past day amid a broader selloff that has wiped off $300 billion in the past day.