Ripple Labs Considering Smart Contracts Functionality On XRPL With Federated Sidechains
The boom in the DeFi space has attracted much attention from institutional investors and even crypto payments specialists. Cross-border digital payments company Ripple Labs is considering adding smart contracts functionality to its XRP Ledger network.
Federated Sidechains To Support Smart Contracts
In a document authored by the CTO of Ripple Labs and principal architect of the XRP network David Schwartz, he proposed adding federated sidechains to the XRP Ledger network.
By this, developers in the XRP community will be able to add new features that would support the creation of native smart contracts. These new features would interoperate seamlessly with the XRP and XRP Ledger network while still allowing the XRP Ledger network to perform its core duty of enabling faster and cheaper cross-border payment settlements.
Speaking on the motive surrounding a break away from the company’s core values, Schwartz noted that the initiative was birthed due to requests by XRP community developers and the significant growth in the decentralized finance (DeFi) space in the last two years.
Explaining how a federated sidechain would work, Schwartz noted that the software would connect to at least two instances of the XRPL software, thereby enabling sidechains connected to the federator to tap into the XRPL mainnet easily.
However, Schwartz said that the sidechains would run their respective blockchains, and the development team could decide to make it permissioned or nearly permissionless. But what would join them to the XRPL software would be the federator which would allow the movement of XRP and other issued tokens from one chain to another.
Given a choice, sidechains could adopt XRP as their native token or launch a separate digital token that reflects their projects.
Ripple Labs is not stopping here, and according to Schwartz, a decentralized exchange (DEX) is also in the works. He noted that federated assets would trade on XRPL's integrated DEX, and the utility token would serve as the liquidity for the DEX platform.
He, however, noted that a few changes need to be made to the XRPL server software by creating a fork of the XRPL software.
Ripple Looks To Host NFTs On XPRL
Ripple Labs has been in the figurative eye of a legal storm in the past six months following an accusation by the Securities and Exchange Commission (SEC) of the digital payment selling unregulated securities to investors.
But Ripple Labs has grown more, and a recent announcement sees it looking to the non-fungible token (NFT) market. In a post, the blockchain firm stated its proposal of addressing the huge carbon footprints that NFTs produce in the course of their minting with its less energy demanding XRP Ledger protocol.
A twin advantage would see creators mint NFTs affordably due to the absence of a proof-of-work (PoW) consensus protocol while also getting more profits. An XRP Ledger-hosted NFT would also make it more accessible for consumers while ensuring the sustainability of the planer, the company said.