XRP Ledger Unveils XLS-85 Token Escrow Update
The XRP Ledger (XRPL) has made significant strides with the introduction of the XLS-85 Token Escrow update on its mainnet, which went live on February 12. This update signifies a major enhancement in the ledger’s escrow capabilities, extending them beyond the native XRP to encompass Trustline-based tokens (IOUs) and Multi-Purpose Tokens (MPTs).
Expanding Escrow Functionality on XRPL
The recent upgrade, which received an 88% consensus from validators, successfully integrates native escrow functionalities with Trustline-based tokens (IOUs) and Multi-Purpose Tokens (MPTs). As a result, a wide array of assets, from stablecoins such as RLUSD to Real World Assets, can now benefit from secure, conditional, on-chain settlements on the XRPL network.
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RippleX’s Announcement
RippleX, in a statement on X, highlighted the transformative nature of this feature: “Token Escrow (XLS-85) is now live on XRPL Mainnet. This feature extends native escrow functionality beyond XRP to all Trustline-based tokens (IOUs) and Multi-Purpose Tokens (MPTs).” This development marks a pivotal moment for the ledger, broadening its utility and appeal.
Enhancements in Transaction Types
The update brings improvements to the existing transaction types such as EscrowCreate, EscrowFinish, and EscrowCancel. These types have been upgraded to accommodate all eligible tokens issued on the XRPL network. The change aligns with the recent activation of Permissioned Domains on XRPL, which aims to enhance institutional-grade features across the platform.
Impact of XLS-85 on XRP
While XLS-85 does not directly affect the demand or supply mechanics of XRP, it plays a crucial role in the strategic positioning of the network. By offering native token escrow support, the XRPL may attract stablecoin issuers and institutional players, potentially leading to increased network activity.
Since XRP serves as the gas and reserve asset for the network, heightened participation could indirectly boost XRP demand. Ripple has ambitious plans to position XRP at the forefront of its long-term strategy, particularly focusing on institutional adoption.
Ripple’s Vision
Ripple CEO Brad Garlinghouse emphasized the company’s mission: “Ripple’s reason for existence is driving success around the XRP and XRP ecosystem. There will be a trillion-dollar crypto company, and I don’t have any doubt that Ripple has that opportunity.”
Applications of the Expanded Escrow Functionality
The broadened escrow capabilities open up numerous applications, including token vesting schedules, grant distributions, conditional payments, over-the-counter (OTC) swaps, and tokenized rights and Real World Asset (RWA) unlock structures.
Native Locking Mechanism
Moreover, the XLS-85 update introduces a native locking mechanism for all supported tokens on the XRPL. This feature facilitates structured settlements, compliance-oriented workflows, and predictable release conditions directly on-chain, eliminating the need for third-party custodians or off-chain agreements.
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