XRP Ledger Welcomes Oracle Pricing Amendment

Earlier today, RippleX took to X to announce that the XRP Ledger (XRPL) Oracle pricing amendment has gone live. This automatically adds the “Price Oracle” feature on XRPL, just as defined in the XLS-47 specification. 

Oracles Grant DApps Access to Stored Information 

The new XRPL amendment is designed to store pricing information, particularly for asset pairs outside of XRPL. 

Doing so allows smart contracts that rely on the network to use the stored information. The system it utilizes is called a blockchain oracle. Here, information about the outside world is fed to the blockchain. Subsequently, Decentralized Applications (dApps) that run primarily on or with the blockchain may gain access to the same information. 

Generally, oracles are recognized for providing a secure and efficient means of bringing real-world data onto a given blockchain system for smart contract use. Institutional Decentralized Finance (DeFi), especially, finds this use case very important, and this is quite central to XRPL. 

Understanding The XRP Ledger Oracle 

More precisely, XRPL’s Oracle is protocol-native. It is not a Layer-2 protocol but a protocol built into the network itself. In fact, it shares close similarities to XRPL’s Automated Market Marker (AMM). The Price Oracle will also permit external oracles like Band Protocol and DIA to connect and provide price feed data. Noteworthy, these external oracles are now integrated into XRPL. 

Once the integrations with these external oracles are established, XRPL’s native oracles provide real-time data for key DeFi features like the AMM and lending protocols. This will mark a significant milestone in the push towards institutional-grade DeFi. This new development comes barely a few days after the XRPL DID amendment went live. 

Another Amendment in XRPL’s Bag 

The debut of the XRPL DID amendment marked another significant milestone for XRPL, as it is a unique, user-owned identifier that is not controlled by any central authority. 

Ultimately, XRPL protocols like the XRPL Lending Protocol for lending rates and liquidation management, which are still under development, will utilize oracles. The XRPL AMM and DEX would also be used to determine asset prices across all Web2 and Web3 marketplaces. 

Similarly, the XRPL EVM Sidechain may require oracles to support Ethereum Virtual Machine smart contracts and quick data syncs between the mainnet and sidechain.