Ripple's RLUSD Stablecoin Sees $1.26B Supply, Dominated by Ethereum Over Native XRPL

Introduction: A Tale of Two Ledgers

In a striking development that underscores the complex dynamics of the blockchain ecosystem, Ripple’s RLUSD stablecoin has achieved a significant milestone, reaching a total circulating supply of $1.26 billion within its first year. However, the distribution of this supply reveals a compelling narrative not about Ripple's own technology, but about the entrenched power of a competitor. Data shows that approximately $1.03 billion, or 82% of RLUSD's total supply, resides on the Ethereum network. In contrast, only $235 million is held on Ripple's native XRP Ledger (XRPL). This stark imbalance highlights a market preference for Ethereum's deep liquidity and composable financial stack over XRPL's more compliance-focused architecture, posing both an opportunity and a strategic challenge for Ripple as it seeks to establish RLUSD as a major player in the stablecoin arena.

The Data: Quantifying the Ethereum Dominance

The numbers, sourced from CryptoSlate and DeFiLlama, paint a clear picture. Since its launch, RLUSD's growth trajectory has been heavily skewed toward Ethereum. A graph tracking the supply from November 2024 to November 2025 illustrates this widening gap. The primary driver behind this disparity is not necessarily a flaw in XRPL's design, but rather the overwhelming maturity and established network effects of the Ethereum ecosystem.

Ethereum continues to lead all blockchain networks in key metrics like Total Value Locked (TVL) and total stablecoin supply. For a new stablecoin like RLUSD, launching on Ethereum means immediate access to a turnkey financial system. It can be seamlessly integrated into major decentralized finance (DeFi) protocols such as Aave, Curve, and Uniswap, inheriting their existing liquidity pools, routing engines, collateral frameworks, and user bases. This provides an unparalleled launchpad for adoption that nascent chains struggle to match.

Why Ethereum? The Liquidity and Composability Advantage

The fundamental reason for RLUSD's success on Ethereum boils down to one concept: liquidity begets liquidity. For institutional players—treasuries, market makers, and arbitrage desks—the ability to execute large trades with minimal slippage is non-negotiable. Ethereum’s DeFi landscape offers this depth.

A prime example is RLUSD’s integration into Curve Finance, a cornerstone protocol for stablecoin swapping. The USDC/RLUSD pool on Curve now holds approximately $74 million in liquidity, ranking it among the platform's larger stablecoin pools. This deep liquidity facilitates the basis trades and sophisticated yield-farming strategies that drive modern crypto capital markets. It creates a virtuous cycle: more liquidity attracts more users, which in turn attracts more liquidity.

Conversely, the XRP Ledger is in the earlier stages of building its DeFi foundation. Its protocol-level Automated Market Maker (AMM) went live only in 2024. Consequently, RLUSD-related pools on XRPL, such as the USD/RLUSD pair created in January 2025, suffer from comparatively shallow depth and have not yet attracted the density of liquidity providers seen on Ethereum. A dollar of RLUSD on XRPL simply finds fewer opportunities for swaps, leverage, or yield generation than the same dollar on Ethereum.

Beyond Vanity Metrics: Evidence of Real Utility on Ethereum

A critical analysis might question whether the large Ethereum supply represents "vanity metrics"—large sums minted but sitting idle in wallets. On-chain data robustly refutes this notion. According to Token Terminal, weekly RLUSD transfer volume on Ethereum now averages approximately $1.0 billion, a dramatic increase from the $66 million average seen at the start of 2025.

This data reveals a structural shift. Activity shows a steady upward trend through the first half of 2025, followed by a consolidation at a significantly higher baseline in the second half. Crucially, recent weeks show activity clustering around this elevated level rather than experiencing isolated spikes. In market structure terms, this pattern typically signals a transition from initial distribution to a sustained utility phase, suggesting RLUSD is being used for recurring flows like institutional settlement or commercial payments rather than one-off speculative events.

Further supporting this thesis is the rise in user participation. Weekly transaction counts on Ethereum have soared to an average of 7,000, up from just 240 in January. The parallel rise in both volume and transaction counts indicates broader adoption beyond a few large whales. Holder data from Etherscan corroborates this: RLUSD on Ethereum has attracted roughly 6,400 on-chain holders as of late November 2025, up from 750 at the start of the year.

The Friction Factor: XRPL’s Compliance vs. Ease of Use

The divergence in adoption can also be traced to fundamental architectural differences between the two networks—differences that create friction for users on XRPL.

On Ethereum, RLUSD functions as a standard ERC-20 token. This universality is key. Wallets, custodians, and DeFi applications are already built to interact with this standard seamlessly. Once a protocol like Curve integrates an ERC-20 token, it becomes part of an open financial universe accessible to anyone with an Ethereum address.

The XRP Ledger employs a different model designed with regulatory compliance and issuer control as priorities. To hold RLUSD natively on XRPL, users must maintain an XRP balance for reserve requirements and configure a specific "trustline" to Ripple as the issuer. Furthermore, if Ripple enables the RequireAuth setting—a feature designed for strict compliance—user accounts must be explicitly allow-listed before they can receive tokens.

While these features are attractive to regulated institutions like banks that require granular control over counterparties, they act as a significant brake on organic, permissionless adoption. In a market where capital flows toward the path of least resistance, the operational burden of managing trustlines makes XRPL less competitive for the high-frequency, automated transactions that define much of today's DeFi activity.

Strategic Implications and Future Pathways

Token Terminal has noted that if RLUSD's market cap were to grow tenfold from its current level, Ripple would cement itself as the third-largest stablecoin issuer globally, behind only Tether (USDT) and Circle (USDC). Achieving this ambition now presents Ripple with a paradoxical strategic challenge: its path to becoming a top-tier stablecoin issuer currently depends heavily on the infrastructure of its biggest rival network.

Looking forward, two primary scenarios emerge:

1. The Base-Case Projection: Over the next six months, RLUSD's supply on Ethereum continues its organic growth, potentially climbing from $1.0 billion to between $1.4 billion and $1.7 billion. This assumes sustained demand on centralized exchanges (CEX), over-the-counter (OTC) desks, and maintained liquidity in core DeFi pools like Curve ($60-$100 million band). Under this path, XRPL would see gradual growth but remain a secondary venue.
2. The XRPL Catch-Up Scenario: For the native ledger to meaningfully close the gap would require deliberate intervention. This could involve Ripple or its partners launching multi-month incentive programs (like liquidity mining rewards) for XRPL AMMs and developing wallet interfaces that completely abstract away the complexity of trustline configuration for end-users. With such efforts, XRPL liquidity could plausibly reach $500 million and claim up to 25% of total RLUSD supply.

However, there is a tangible downside risk for XRPL: if Ethereum's lead becomes too entrenched—for instance, if the Curve USDC/RLUSD pool expands beyond $150 million—the network effects could become insurmountable. In that scenario, Ethereum might permanently retain 80% to 90% of RLUSD's total supply.

Conclusion: A Defining Paradox for Ripple’s Vision

The story of RLUSD’s first year is one of impressive growth shadowed by strategic irony. The stablecoin has successfully leveraged Ethereum’s mature DeFi ecosystem to achieve rapid scale and demonstrate genuine utility through high transaction volume and a growing holder base. This success validates RLUSD’s market fit but does so largely outside Ripple’s own technological domain.

For crypto readers and market observers, this case study underscores a critical lesson: in the battle for stablecoin supremacy, liquidity depth and developer ecosystem maturity can outweigh brand loyalty or native chain advantages. The market has voted with its capital, favoring Ethereum’s permissionless composability for now.

The key developments to watch next will be Ripple’s strategic moves regarding its native ledger. Will it double down on incentivizing XRPL DeFi to foster a more competitive environment for RLUSD? Or will it pragmatically continue to prioritize growth on Ethereum while positioning XRPL as a specialized settlement layer for its core institutional clients? The resolution of this ledger imbalance will not only shape RLUSD’s future but also provide broader insights into whether newer blockchain architectures can disrupt the powerful network effects established by incumbents like Ethereum.

Mentioned in this article: Ripple (XRP), Ethereum (ETH), Tether (USDT), Circle (USDC), Aave (AAVE), Curve Finance (CRV), Uniswap (UNI).