Ripple Labs has announced a new plan to allow decentralized finance (DeFi) developers to build Ethereum-based applications on XRP Ledger. Ripple believes the future of blockchain is multi-chain. The shift to a multi-chain approach has led to the introduction of EVM on XRP Ledger.
The need to achieve interoperability has led Ripple Labs to introduce Ethereum Virtual Machine (EVM) compatibility on its XRP Ledger. The XRP Ledger’s developer community reportedly requested cross-chain compatibility with the Ethereum blockchain. As a result, Ripple plans to unveil the XRPL EVM sidechain, a product that will allow EVM compatibility on the XRP Ledger.
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According to Ripple, the XRPL EVM sidechain will open up opportunities for developers to explore Real World Asset tokenization. The DeFi developers will be able to maximize XRPL’s interoperability to drive innovation and expand the network’s utility and reach.
Ripple announced that it plans to connect the XRPL EVM sidechain to the XRPL mainnet. The process will undoubtedly require a bridge. The bridge will ensure transaction processing and interoperability by allowing efficient transfer of assets between the mainnet and the sidechain.
Ripple Labs prefers the Axelar network for Security
1/ Introducing the XRPL EVM Sidechain: We're excited to bring Ethereum Virtual Machine (EVM) compatibility to the XRP Ledger, enhancing interoperability and unlocking new opportunities in DeFi and RWA. https://t.co/lenc4Bl9TZ
— RippleX 📍#XRPLApex (@RippleXDev) June 12, 2024
According to Ripple Labs, the Axelar network will provide the required security for the bridge. The Axelar bridge is reportedly going to be the only bridge able to source native gas tokens of the sidechain, that is the XRPL EVM sidechain.
According to the announcement, the Axelar bridge can also serve over 55 other blockchain networks to promote further interoperability. Ripple Labs believes that Axelar’s decentralized bridge will provide the required infrastructure through its validator network.
The Engineering team at Ripple has also been working alongside Peersyst. The CEO of Peersyst, Ferran Prat, has expressed his support for the interoperable blockchain. In Ripple’s blog post, Prat said,
“Axelar is a battle-tested, production-ready and fully compatible bridge to bring wrapped XRP (eXRP) as a native currency to the XRPL EVM sidechain. The Peersyst engineering team is now working to migrate the main bridge to Axelar for the devnet.”
The Axelar team is reportedly experienced in cross-bridge technology. Apparently, Axelar’s bridge technology has been used on Uniswap and Microsoft. Considering the multi-purpose nature of the Axelar bridge, Ripple Labs announced that it considers using a single bridge which is a better approach as opposed to multiple bridges, that is, XLS-38 for XRP and Axelar for other cross-chain smart contracts.
Ripple envisions institutional DeFi on XRPL
Earlier in March, Ripple outlined its plans for DeFi on XRP Ledger. The crypto payment platform aims to provide the foundational building blocks for a successful financial system. In its primary plan, Ripple plans to streamline XRPL to properly support the issuance, value transfer, exchange, and credit facilities. This way, the technology will have all the right components of a complete financial system.
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The crypto firm proposed an Automated market maker, which is currently live. Additional items on the roadmap included decentralized identifiers (DiDs), Oracles, Multi-Purpose Token (MPT), and XRPL-native Lending Protocol, all of which are at different stages of actualization.
Ripple continues to innovate and strive for its place within the crypto industry. The firm has faced multiple regulation issues with the U.S. SEC, which has significantly weighed it down. Lately, the crypto firm has been actively innovating to compete effectively in the fast-growing crypto industry. New innovations can be evidenced by Ripple’s recent announcement to launch a stablecoin.
Cryptopolitan reporting by Collins J. Okoth
