XRPL Labs Engineer Proposes Options Sidechain With 200x Leverage

XRPL Labs software engineer Denis Angell posted a GitHub document on Twitter outlining a sidechain built for American-style options trading with up to 200x leverage on margin positions. He captioned the tweet "Something big."

The proposal combines three systems at the protocol level: a trustless bridge connecting to the XRP Ledger mainchain, native options and margin trading, and WebAuthn/FIDO2 passkey authentication. That authentication layer would let users trade using face ID, touch ID, or hardware security keys without traditional wallet interfaces.

XRP enthusiast WrathofKahneman broke down the technical approach on X, saying the proposal is purpose-built for options and leverage with a bridge back to XRPL. The sidechain would tap into MPtokens, the tokenized assets already circulating in the XRP Ledger ecosystem, as a liquidity source for derivatives markets.

Angell's design follows the sidechain model Ripple CTO David Schwartz has championed for XRPL's growth strategy. Rather than loading specialized features onto the mainchain and risking performance degradation, sidechains handle niche use cases while the mainchain maintains speed and efficiency. XRPL already operates two live sidechains: Xahau Network with smart contract capabilities and an EVM-compatible chain for Ethereum developers.

The proposal aims at a crypto derivatives market the document describes as multi-trillion-dollar in size. Hyperliquid, a competing Layer 1 with a native order book, has captured billions in daily trading volume by offering perpetual futures. Deribit still dominates on-chain options volume through its centralized exchange model, but decentralized alternatives have struggled to gain traction. The sidechain would use the same validator network securing the XRP Ledger mainchain rather than bootstrapping a new consensus mechanism, with Xahau Network and the EVM-compatible chain already operational.