XRP Could Do to Options What Hyperliquid Did to Futures, Here Is How

A Developer Just Proposed Something XRP Has Never Had Before

The XRP Ledger has processed billions of transactions over nearly 15 years of continuous uptime. It has a native decentralized exchange, sub-4-second transaction finality, and some of the lowest fees in the industry. What it has never had is a derivatives layer. A new proposal from XRPL Labs software engineer Denis Angell aims to change that, and the details are worth reading carefully.

Angell shared the proposal on GitHub with a short caption: "Something big." XRP enthusiast WrathofKahneman followed up on X with a breakdown of what the document actually contains.

What Is the XRPL Options Sidechain?

The proposal outlines a purpose-built trading chain that would run alongside the XRP Ledger mainnet. It is not a modification to the existing XRPL protocol. It is a separate, dedicated chain designed specifically for financial derivatives, connected to the mainnet through a trustless cross-chain bridge.

The core offering includes three components:

• American-style options contracts settled at the protocol level, not through automated market makers or synthetic positions
• Leveraged margin trading with up to 200x exposure
• A cross-chain bridge using a cryptographic mechanism called XPop to move assets between the sidechain and XRPL mainnet

American-style options, for context, differ from European-style options in one key way: they can be exercised at any point before the expiry date, not just on it. This flexibility makes them the standard instrument in traditional finance and the preferred format for professional traders.

Why the Proposal Points to Hyperliquid

The document draws a direct comparison to Hyperliquid, the purpose-built Layer 1 blockchain that became one of the most-used platforms in decentralized finance by focusing exclusively on perpetual futures trading. Hyperliquid launched with 16 validators, built a native order book into the chain itself, and grew to a token valuation of over $9 billion without venture capital funding.

The proposal argues that XRPL is positioned to do something similar for options, a market currently dominated by centralized exchange Deribit, which handles the majority of on-chain crypto options volume.

How the Cross-Chain Bridge Actually Works

The bridge uses XPop, a cryptographic proof confirming that a transaction was validated and included in a specific mainnet ledger. For a transfer to go through, 80% or more of the validator set must sign the proof. This is structurally similar to how Hyperliquid's Ethereum bridge operates, where two-thirds of staking power must approve withdrawals.

Key design details of the bridge include:

• A 1:1 lock-and-mint model, meaning the total sidechain supply can never exceed the vault balance on mainnet
• No amendments required to the existing XRPL mainnet
• Full replay protection at both the account and validator list level
• Automatic account creation on first import

The vault itself is a standard multisig account, which means the bridge does not require any changes to how the mainnet currently operates.

Is This Built for Institutional Traders?

That appears to be a deliberate design choice. The sidechain introduces native support for WebAuthn and FIDO2 passkey authentication, a security standard used by major banks, Google, and Apple. In practical terms, this means traders can sign transactions using Face ID, Touch ID, Windows Hello, or hardware security keys like YubiKey.

This removes what the proposal describes as the single biggest operational security risk in on-chain trading: private key management. Seed phrases are replaced by device-native biometrics with no custodial risk. Accounts can register up to 10 passkey credentials, which supports enterprise multi-device setups and hardware key backup.

What Validators Are Being Asked to Do

The proposal is actively recruiting established XRPL validators to support the sidechain. Validators would run a sidechain node using the same rippled software stack already in use, participate in consensus for the options chain, and serve as witnesses for bridge transactions by co-signing vault releases on the mainnet.

The security audit for the sidechain is planned to be funded through the XRPL Grants program. The audit scope is notably more complex than a standard smart contract review. The codebase is written in C++, operates at the protocol layer, and involves options pricing logic, margin mechanics, liquidation systems, and cross-chain bridge security.

What Is Happening With XRP Right Now

The proposal arrives during a period of notable market stress for XRP holders. On-chain data shows more than 472 million XRP, worth approximately $650 million, moved to Binance over the past week, the largest inflow period recorded in February.

On-chain analyst Darkfost attributed the shift in part to geopolitical events, including a joint strike by Israel and the United States on Iran over the weekend, which triggered a sell-off across crypto markets. Reports of Iran's Supreme Leader being killed added further uncertainty. Gold surged as investors rotated toward traditional safe havens.

Large exchange inflows are commonly interpreted as a signal of potential selling pressure, since tokens typically need to be on a trading platform before they can be sold. Darkfost was measured in his interpretation, noting that such inflows can also reflect arbitrage strategies, collateral management, or precautionary liquidity positioning. Still, Binance's XRP reserves have risen, and the risk of short-term downside remains if geopolitical uncertainty continues.

Conclusion

The XRPL Options Sidechain proposal is detailed, technically specific, and draws on a proven model in Hyperliquid's architecture. It addresses a real gap in the XRP ecosystem, namely the absence of any native derivatives infrastructure, and its design choices, particularly the passkey authentication and the validator-anchored bridge, reflect a clear institutional focus. The proposal is still at the outreach and audit-preparation stage, with no confirmed mainnet launch date.

Resources 

1. The Proposal by Denis Angell: XRPL OPTIONS SIDECHAIN

2. Darkfost on X: Post on March 2

3. Hyperliquid Documentation: About Hyperliquid