XLS-80 Tipping Point: Will XRP Ledger Outpace Ethereum in 2025?

The crypto arms race heats up as XRP Ledger''s XLS-80 upgrade threatens to rewrite the blockchain hierarchy.

Ethereum''s dominance challenged

Faster settlements, lower fees—XRP''s latest tech leap bypasses Ethereum''s scaling headaches. Institutional adoption could follow, provided regulators don''t pull their favorite move: changing the rules mid-game.

Gas wars meet their match

While Ethereum struggles with layer-2 fragmentation, XLS-80''s native efficiency cuts through congestion like a hot knife through DeFi butter. The ledger''s throughput now flirts with triple-digit TPS—no sidechains required.

Market dynamics shifting?

Traders eye flipping scenarios as XRP''s utility cases multiply. But let''s be real—whether this triggers actual adoption or just another speculative frenzy depends on who''s holding the bag when music stops.

TLDR

• XRP Ledger XLS-80 introduces permissioned domains for native compliance and regulated access.
• Experts suggest XLS-80 could give XRPL an advantage over Ethereum in institutional adoption.
• Ethereum continues to rely on off-chain compliance solutions through app-layer smart contracts.
• Ripple CTO David Schwartz explained that permissioned AMMs will restrict pool access to verified users.
• The upcoming XRPL 2.5.0 upgrade is expected to strengthen the ledger’s appeal to regulated financial entities.

The upcoming XLS-80 feature on the XRP Ledger (XRPL) has reignited comparisons with Ethereum, highlighting native compliance as a key differentiator. Expert commentary, alongside Ripple CTO David Schwartz’s insights, signals a competitive shift toward integrated permissioned domains. The development comes ahead of XRPL’s version 2.5.0 upgrade, expected to expand institutional use and regulatory support.

XRP Ledger Gains Compliance Edge With XLS-80 Integration

XLS-80 introduces permissioned domains directly on the XRP Ledger, enabling native regulatory compliance and reducing external dependencies. This integration could allow institutions to create compliant environments while operating directly on-chain without using off-chain tools. As a result, organizations may find fewer barriers when joining XRPL-based ecosystems.

Institutional interest often hinges on access control and regulatory assurance, which XLS-80 aims to provide within the base layer. Unlike Ethereum, where projects must develop isolated permissioned layers, XRPL offers compliance capabilities embedded in its protocol. Therefore, organizations may save time and resources by avoiding additional contract frameworks.

Expert WrathofKahneman emphasized that XRP Ledger’s native approach provides a streamlined method for managing permissions without external validators or KYC lists. Ethereum’s off-chain models like AAVE Arc rely on whitelisted pools, which introduce complexity and external points of failure. XLS-80’s simplicity could appeal to firms requiring direct control over access and liquidity management.

6⃣ Compliance Goals: XRPL vs. Ethereum
XLS-80 would embed compliance directly into the protocol. In contrast, ethereum handles compliance off-chain: permissioned DeFi apps like Aave Arc require separate contracts or private pools gated by external KYC lists. By remaining native…

— WrathofKahneman (@WKahneman) June 17, 2025

Ethereum Relies on Off-Chain Compliance Layers

Ethereum handles institutional compliance through app-layer mechanisms, requiring DeFi protocols to enforce permissions via additional smart contract systems. These include features such as KYC-gated pools and regulated access managed outside the base protocol. While flexible, this system creates reliance on separate off-chain lists and middleware providers.

Projects like Aave Arc serve institutional users through gated pools, but must maintain updated lists and external verification. While adaptable, this structure demands ongoing integration efforts and trust in third-party data sources. These steps can slow down onboarding and complicate auditing processes.

Ethereum’s decentralized flexibility remains a strength, yet institutions may prioritize integrated control and clear compliance pathways. In contrast, XRP Ledger offers native enforcement tools that remove the need for standalone governance contracts. This allows domain-level policies to be executed more transparently within the protocol’s core.

Ripple CTO Responds on AMM and Permissioned Domains

Ripple CTO David Schwartz explained that XLS-80 enables permissioned access within XRPL’s Automated Market Maker (AMM) framework. Domains can restrict pool participation to verified users, removing direct redemption rights for unauthorized parties. The LP tokens remain transferable but no longer grant access to restricted liquidity pools.

According to Schwartz, permissioned AMMs enforce access control while preserving the tradability of LP tokens on open decentralized exchanges. This design ensures institutional users can comply with regulations without losing exposure to broader liquidity. Furthermore, domains do not hold LP tokens but govern the conditions of participation.

These developments align with Ripple’s broader strategy to attract enterprise users while enhancing protocol utility. The introduction of XLS-80, combined with XRPL’s consistent upgrades, positions the ledger to support scalable institutional finance. Experts see the permissioned domain model as a key competitive differentiator in blockchain compliance.