Ripple (RLUSD) Stablecoin Explores New Market Avenues, Targeting Aave's Vast Liquidity Protocol

In a notable move, RLUSD and Aave, the world's most extensive liquidity protocol, recently partnered to allow users to access the stablecoin on its platform.

Ripple stablecoin (RLUSD) is significantly increasing its trading activity amid the broader crypto market volatility. The market dynamics have sparked interest in RLUSD as users are looking for new accessibility.

Aave Partnership Drives Record Liquidity Surge

In a recent partnership, RLUSD and Aave, the world’s most extensive liquidity protocol, have partnered to allow users to access the stablecoin on its platform. Users can access RLUSD on Aave’s V3 Ethereum Core market per the partnership.

This development will see users able to supply and borrow RLUSD on Aave, with a $50 million cap on the lending pool and a $5 million borrowing limit.

This partnership follows Aave’s integration of V3 in December 2022, expanding its V3 footprint with the addition of the Ethereum Core market. Aave V3 provides efficient and seamless borrowing and lending services in a decentralized manner.

After this integration, Aave has become the third-largest DeFi protocol, boasting over $10 billion in total value locked (TVL).

The partnership with Aave has seen the stablecoin hit a new all-time high (ATH) within just days of this collaboration, according to IntoTheBlock data.

Between April 21 and April 25, 77,350,849.54 RLUSD was supplied on Aave. The over 77 million RLUSD supply could signal increased liquidity, and potential borrowers can access the funds.

This massive uptick in volume supply suggests growing adoption and trust in RLUSD despite it being a new entrant in the stablecoin market. It shows that users are comfortable using RLUSD even with USDT and USDC as options.

This integration marks a significant development for the RLUSD ecosystem, signaling its integration into the broader decentralized finance (DeFi) world.

It is worth noting that stablecoin usage is surging across the globe, and in 2024, the number of holders has risen by 15%.

The increased adoption is evident with RLUSD, which has been in operation for less than five months.

Ripple stablecoin now has a circulating supply of 294,042,711.84 RLUSD.

As expected, RLUSD has seen the most growth with the XRP/RLUSD trading pair. According to XPMarkets data, more than 9,500 transactions were registered in the last 24 hours. The ecosystem has 3 million XRP in liquidity at $2.2 per coin, valued at $6.8 million.

Other major RLUSD stablecoin pairs are SLT/RLUSD, which has liquidity of $53,500, XPM/RLUSD, which has liquidity of $10,900, and FUZZY/RLUSD, which has liquidity of $5,800.

Miles Behind USDT and USDC, Can RLUSD Challenge Their Dominance?

Some have questioned if RLUSD could compete with established leaders like USDT and USDC. These two are the dominant players with market capitalizations of $146.09 billion for USDT and $62.36 billion for USDC.

In comparison, the Ripple USD token’s market cap is still under $300 million. After four months of operation, it is $294 million.

USDT, which launched in 2014, holds over 50% of the market share and is the third-largest crypto asset by market capitalization.

The asset has a first-mover advantage and unmatched liquidity compared to the Ripple token. This implies that for RLUSD to stand a chance, it will need massive adoption and years to play catch-up.

Meanwhile, USDC appears to be a stricter competitor for RLUSD. Notably, Circle has the backing of Coinbase and growing U.S. adoption. The stablecoin’s established trust and liquidity also give it an edge over other players.

For RLUSD to stand a chance, it must leverage Ripple’s payment infrastructure and push for broader global utility. It could also use its regulatory compliance to drive user adoption.

In the short term, the stablecoin can finish among the top five-ranked assets in the sector by the end of 2025. Ripple Labs’ CEO, Brad Garlinghouse, has set this as RLUSD’s target. If that’s achieved, RLUSD could begin aiming to compete with USDT and USDC in the next 5 – 10 years.