Ripple’s Bold Gambit: Ethereum-Style Smart Contracts, DeFi Lending & Regulatory Breakthroughs

Ripple’s playing catch-up—and they’re throwing knockout punches. The XRP ledger just unveiled its most aggressive upgrade yet: full EVM compatibility, a native lending protocol, and a regulatory playbook that could finally silence the SEC’s tantrums.

Smart contracts on XRP? Done. The network now executes Solidity code natively—opening floodgates for 3M+ Ethereum devs to port their dApps. Liquidity pools and yield farms go live Q3 2025.

DeFi without the drama. Ripple’s built-in lending protocol bypasses messy collateral requirements. Borrow against XRP holdings at 0% interest—if you’re an accredited investor (because Wall Street still gets VIP treatment).

The legal chess move. Every transaction now auto-generates a compliance audit trail. It’s overkill transparency—perfect for regulators who still think blockchain is magic internet money.

Ripple’s betting big that institutions want crypto’s yields without its anarchic roots. Will it work? Maybe. But watching bankers try to explain smart contracts will be priceless.

Ripple’s doubling down on XRPL’s future

Ripple is making bold moves to upgrade the XRP Ledger. 

Earlier this year, Ripple bought Hidden Road, a well-known prime broker, for $1.25 billion. Prime brokers help large investors by offering services like trade execution.

With this deal, Ripple is giving institutions better tools to trade capital using XRP.

But that’s just the start. Ripple is also planning to launch a new lending protocol in Q3 2025. It’s also adding more programmability, bringing smart contract features that could let developers build apps like they do on Ethereum.

Put together, this roadmap is clearly targeting institutional readiness.

With ETF speculation heating up and Ripple officially withdrawing its cross-appeal in the SEC case, the timing between legal clarity and technical expansion couldn’t be better.

Source: X

The market’s early response reflects that shift. At press time, XRP broke out above $2.15, rallying 5%, while Open Interest (OI) climbed 3%, indicating speculative liquidity is re-entering derivatives markets. 

But the catch is, none of this sticks without real institutional buy-in. The XRPL roadmap mirrors Ethereum’s playbook post-upgrade. But to generate similar re-pricing, institutional capital must follow. 

The tech is there, but is Wall Street watching?

The XRP/ETH ratio offers a clear lens into capital rotation dynamics. 

From the 13th of November, the ratio exploded 550% over five months, closely tracking XRP’s 217% rally off its $0.70 base, topping out NEAR $3.40 in mid-January.

What’s notable is how the ratio held firm despite XRP shedding 35% from its peak.

While Ethereum sank to a multi-year low of $1,440, the ratio stayed resilient DEEP into Q2, signaling that rotational flows favored XRP through much of the drawdown.

Source: TradingView (XRP/ETH)

But by late Q2, the tide turned. The ratio collapsed nearly 40%, bottoming at 0.0008, marking a sharp divergence. The catalyst? Ethereum’s Pectra upgrade.

Deployed in early May, Pectra helped ETH break through the $2,000 ceiling, igniting a wave of renewed inflows. Stablecoin velocity spiked, BlackRock kicked off accumulation, and annualized fees crossed $7.3 billion.

More importantly, with the Glamsterdam upgrade slated for late 2026, ETH regained narrative dominance. Now, Ripple’s pivot toward “Ethereum-style” upgrades looks far more strategic than coincidental.

But will the market respond the same way? That’s the inflection point. Without institutional follow-through, the XRP/ETH ratio could chart even lower.