Ripple Turns to Chainlink to Push RLUSD Stablecoin Into DeFi

Digital payment network Ripple is looking to make inroads into the decentralized finance (DeFi) marketplace with its new RLUSD stablecoin.

Less than a month old, Ripple USD is a dollar-pegged stablecoin backed by U.S. dollars and Treasuries. Stablecoins are cryptocurrencies pegged to a fiat currency, usually the U.S. dollar, and can make expensive transactions that take days through the traditional financial system almost instantaneous and extremely cheap.

While cross-border payments firm Ripple said it created the stablecoin “to accelerate the adoption of stablecoin-based payment,” it is also eager to boost its adoption in DeFi, which is likely to increase RLUSD’s market capitalization and utilization substantially.

To do this, Ripple needs support from decentralized exchanges (DEXs), lending/borrowing protocols, and other DeFi infrastructure.

However, “to support RLUSD as an asset, many DeFi applications first require a high-quality, reliable source of price data to manage risks,” Ripple said in a statement. That means data sourced from multiple exchanges, cleaned of wash trades, and generally made as accurate as possible.

Oracles needed

That comes from oracles, providers of trusted data from both on- and off-chain sources. The data can be anything from the price of a cryptocurrency to the scores of basketball games.

Ripple chose to work with Chainlink, which is by far the largest oracle provider and secures nearly $35 billion in value, according to DeFiLlama.

​​“As RLUSD scales across DeFi ecosystems, reliable and transparent pricing is essential to maintaining stability and building trust in its utility within decentralized markets,” said Jack McDonald, SVP of Stablecoins at Ripple. “By leveraging the Chainlink standard, we bring trusted data onchain, further strengthening RLUSD’s utility across both institutional and decentralized applications.”

RLUSD is natively available on two blockchains, Ethereum and the XRP Ledger, and is compatible with smart contracts on both.

Ripple’s XRP token has been on a tear lately, recently flipping USDT to become the third-largest digital asset by market capitalization.