XRP Ledger DEX Uses XRP Routing When It Beats a Direct Trade

Evernorth Chief Business Officer Sagar Shah described RLUSD as a dollar asset and XRP as a possible intermediary for trades between other assets in a June 15 communication. The distinction reflects one possible use for XRP on the XRP Ledger, whose decentralized exchange uses auto-bridging when routing through XRP offers a cheaper rate than trading directly.

“RLUSD isn't trying to be the swap kid,” Shah wrote. He framed RLUSD as suited to trades with a dollar leg and XRP as a potential bridge for trades without one.

Shah’s examples included tokenized U.S. Treasuries exchanged for tokenized euro money market funds and lending markets denominated in different assets. Those examples illustrate his argument; they do not establish that the trades are taking place on the XRP Ledger.

The ledger’s decentralized exchange can combine direct offers with offers routed through XRP. Auto-bridging is conditional: the feature uses XRP when that route beats a direct trade on price. It does not require every token pair to pass through XRP.

Payment transactions do not use auto-bridging by default. Pathfinding can find payment routes with a similar effect, but that is distinct from auto-bridging on the decentralized exchange.

Ripple customers can redeem RLUSD for $1, subject to applicable conditions and limitations. The distinction between a dollar-denominated token and a possible bridge asset echoes earlier coverage of RLUSD’s potential relationship with XRP liquidity.