XAO DAO is set to bring decentralized governance to XRP Ledger

XAO DAO has announced plans to launch the first decentralized autonomous organization (DAO) on the XRP Ledger. The Wyoming-based limited liability company (LLC) disclosed this on X, noting that it will bring a new era of decentralized innovation.

According to the announcement, XAO DAO is a next-generation governance engine for the XRPL network that will allow users to participate in the network governance.  The post highlighted why DAOs are important, noting that they promote transparent processes and empower users to participate actively.

XAO DAO is a for-profit entity co-founded by Fabio Marzella and Santiago Velez. With the DAO,  XRPL network users can become involved in its governance once they become a member and can vote on allocating network resources to support ecosystem projects and other proposals.

Interestingly, the DAO stated there is no plan to launch a token as the core focus is on real utility, and XRP remains the token.

It said:

“Our focus is on real utility, governance, grants, and community. Not meme charts and mystery pumps. Show up. Get involved. Help build. That’s the real value to help shape the future of the XRPL.”

Meanwhile, the post explained how voting would work, noting that voting value will be based on the amount of XRP held at the time of the snapshot, with all votes mattering equally. XAO DAO is yet to launch, but those interested in becoming members can already sign up for the waitlist.

How will the XAO DAO function

While the XAO DAO post focused on what the DAO brings to XRPL, popular XRP investor WrathofKahneman on X explained its purpose. He stated that XAO DAO is expected to provide a governance mechanism for distributing the 1 billion XRP that Ripple allocated to develop the XRPL ecosystem.

So far, Ripple has been handling the allocation of the grants to projects on XRPL. However, a newly formed XRPL Foundation is now set to take over that responsibility, and the Foundation will use the XAO DAO governance system to determine who gets the grant.

Interestingly, the XRPL Foundation’s bylaws give XAO DAO a board. The DAO, along with XRPL Commons, XRPL Labs, and Ripple Labs, are the founding members of the XRPL Foundation.

Meanwhile, XAO DAO founder Santiago Velez has explained that the DAO governance application will use both XRPL and the XRPL Ethereum Virtual Machine (EVM) sidechain. While the XRPL will be used to record membership of the LLC, the sidechain will be used to mint and burn governance tokens for each proposal and vote.

Decentralized governance could boost XRPL DeFi

With XRPL now set to support decentralized governance, many people in the XRP community have welcomed the news as a big step towards full decentralization. For them, it is a sign of maturity and could finally boost innovation and DeFi activity on XRPL.

While the network has been around for 13 years, it has struggled to generate significant activity compared to its peers. However, recent developments suggest that this could change. Since the XRPL APEX Conference,  the network has seen several integrations and more upcoming products.

Circle USDC recently expanded to the network, while Ondo Finance also launched tokenized US treasuries. Its EVM sidechain is also set to deploy soon.

Meanwhile, XRP itself is also positioned to increase adoption by TradFi and DeFi. On June 18, asset manager 3iQ launched an XRP exchange-traded fund (ETF) on the Toronto Stock Exchange. Several DeFi protocols are also developing products around XRP, and Flare Network plans to introduce FXRP on its mainnet. Firelight protocol also wants to launch a liquid staking derivative of the token stXRP.

All the interest and developments concerning XRPL and XRP have already boosted the network activity, with a 3-month average for active addresses now at 295,000. XRP has also held steady despite recent volatility and is up more than 1% today.

Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot