Since we launched USDC, USDT, WXRP and GALA we have been receiving a ton of questions. The goal of this blog is to help you understand how these assets work, how GateHub helps you bridge these assets on and off the XRPL and what the XRPL does and does not let you do with them.
We need to make a point that we have supported new assets as ERC-20 tokens on the Ethereum network. This means that all of these assets are tokenized on the XRPL by GateHub and can only be transferred to and from GateHub via Ethereum network.
In order to transfer these assets from and to the XRPL, users need a verified GateHub account. There is no other way to transfer any GateHub asset from and to the XRPL.
USDT and USDC stablecoins
USDT and USDC are stablecoins pegged and backed by real USD. They were both created originally on the Ethereum blockchain as ERC-20 tokens. Their issuers are Tether and Coinbase respectively. Their main strength is that they offer a fiat denominated safe haven and tool for value transfer on a decentralized blockchain.
Actual USDT and USDC have not been released on the XRPL. See the “Holding “real” assets” section below.
Since its inception USDT has found its way onto other blockchains like Tron, Solana, EOS, Binance Chain and others.
Wrapped XRP (WXRP)
In the simplest terms, wrapped assets are used to represent a coin from one chain on another chain. Native assets are locked on the native blockchain and wrapped assets are issued on a different chain. In the case of WXRP, XRP is locked on the XRPL and WXRP are issued on the Ethereum network, allowing the exchange and transfer of a directly derived XRP denominated asset over Ethereum.
The difference between XRP and WXRP
XRP is a native asset on the XRP Ledger. It is used for reserves and transaction fees on the XRP Ledger. As the native asset it can be transferred freely between any two XRPL accounts and traded to any other token on the XRPL.
Wrapped XRP or WXRP is a native asset on the Ethereum network that represents actual, locked XRP on the XRP Ledger. It can be used to trade (swap) XRP denominated tokens with other tokens and assets on the Ethereum network via DeFi like Uniswap or SushiSwap.
On GateHub, WXRP can be used for trading on the XRPL DEX. The goal and benefit of this listing is to boost the stability, adoption and liquidity of WXRP on the Ethereum blockchain for Ethereum users as well as boost the XRPL DEX liquidity. An obvious result of this listing is the continuous opportunity of arbitrage which inevitably results in balanced and liquid markets on Ethereum and the XRPL.
The GALA token is the digital utility token of the Gala Games ecosystem.
How GateHub works - a refresher
GateHub is, among other things, an XRPL gateway. This means that GateHub offers a way of tokenizing assets on the XRPL by providing a “bridge” from the native network to the XRP Ledger. By doing this, any asset supported by GateHub is afforded all the abilities offered by the XRPL, namely, near-instant and near-free transactions and a state of the art order book based decentralized exchange.
Ethereum based DeFi only supports swaps.
A simple example is this:
- A user makes a USDT transfer to GateHub via Ethereum network.
- The actual USDT is stored and kept safe by GateHub and an equivalent amount of GateHub USDT is given to the user on the XRPL.
- GateHub users and other XRPL users can trade, exchange and send payments with this token that represents actual USDT.
- When the time comes to redeem the actual USDT, a GateHub user can trigger a withdrawal request by sending their GateHub USDT tokens to GateHub and the actual USDT is sent over the Ethereum network.
All of our new assets have been supported as ERC-20 tokens, therefore they behave in the same manner. For now, unfortunately, there is no possibility to receive or send any of these over a different network, as many have asked.
Remember, you must be a verified GateHub user in order to use GateHub’s cross-chain bridges.
We posted a more detailed explanation of how custodial, non-custodial and decentralized exchanges work.
Gateways - “Do I need to connect a gateway for USDT/USDC/GALA/WXRP?”
The process of connecting gateways on GateHub has been automated for you. Once you become a GateHub user, you are automatically able to transact all GateHub supported currencies.
The exception is XAU. You need to connect to the BPG gateway in order to transact XAU. Navigate to Settings - Gateways and click Connect next to the BPG listing.
Assets and issuers
The XRPL is home to more than 7k tokens. Please keep in mind that not all of them are legit and not all of them can be redeemed for their actual counterparts anymore.
Multiple issuers may issue the same asset but that does not actually make them the same. A notable example of this case are GateHub USD and Bitstamp USD. The difference is that GateHub USD can only be redeemed to a bank account via GateHub and Bitstamp USD can only be redeemed to a bank account via Bitstamp. Their XRPL market value is derived from the open orders on the XRPL DEX and may vary from the values seen on other markets. Note that they can also vary between themselves.
Some gateways have ceased their operations and neglected to freeze their issued tokens on the XRPL. A notable example is SnapSwap BTC which is now worthless as it can’t be redeemed for its actual counterpart on Bitcoin. You can easily protect yourself from these sorts of assets by simply not creating any trust lines for unknown issuers and currencies.
The case of XUMM
XUMM is a decentralized, non-custodial XRPL client.
You CAN NOT make transfers from and to a native network like Bitcoin and Ethereum. Because XUMM is an XRPL only application it lets you harness the power of the XRPL. For cross-chain capabilities, you need a verified account on GateHub.
Sending assets to other exchanges
You can send your USDT, USDC, GALA, WXRP and any other assets to other exchanges like Coinbase only through Gatehub. With XUMM, you can only trade and transfer the tokens on the XRPL for now.
Ethereum fees and specifics
As many have pointed out, the fees to transfer assets over Ethereum have been expensive. We are making every effort to keep deposits and withdrawal fees down to a minimum.
We are aware of alternative networks and assets for cheaper and faster transactions, particularly for USDT, but this requires a significant amount of work. We’ll keep everyone updated about any developments on this topic.
Holding “real” assets
Remember, USDT and USDC are native assets on the Ethereum network. When transferring them (and others) to your XRPL wallet on GateHub, the assets are tokenized and you can utilize the power of the XRP Ledger for sending and trading them instantly and at a fraction of the cost.
If you wish to hold actual ERC-20 assets - or actual BTC, BCH, LTC, SGB and others - you need a native blockchain wallet like Metamask (for Ethereum and Ethereum based assets).
Whenever you are using a custodial exchange like Binance, Coinbase or Kraken, you are actually holding a token on an internal ledger. This token gives you the right to redeem the actual asset from the exchange (custodian) to a native address of your choice.
GateHub gives you the ability to hold actual XRP on your XRPL wallet and tokenized assets like BTC, USDT, ETH, SGB and others.
The case of Ledger and Ledger Live
If you hold your XRP on a Ledger, you need to be aware that what you are actually using is an XRPL native address. This gives you all the possibilities you get with an XRPL wallet on GateHub but you need to figure out how to set trust lines and how you can make transactions and exchanges with your Ledger address.
The process may be more or less complicated and you will likely need to use your private key more than you would ideally want to.
Please consult the Ledger and Ledger Live documentation for more information.
The question of staking pops up regularly so we’ll address it here.
Unfortunately for the most loyal XRP supporters, the XRPL is not a proof-of-stake network. This means that there is no possibility to stake your XRP natively and earn a passive income. We are aware of some services that offer a return on holding XRP via a savings type account.
Other proof-of-stake assets on GateHub now (SGB, ETH - upcoming) can not be staked on GateHub. You need to set up your own native wallet and figure out staking for yourself.
We are not actively working on any staking or savings solutions at the moment but we are researching the possibilities.
On cross-chain capabilities
As explained above, GateHub is an XRPL gateway (among other things). This means that GateHub offers a cross-chain ramp for fiat, crypto and commodities. At the moment, you need a verified GateHub account in order to transfer tokens from the XRP Ledger to their native chains and back.
Decentralized solutions exist but operate in a different manner, so do your own research to see how they work and benefit you.