Ripple is enhancing the XRP Ledger by integrating Ethereum-compatible smart contracts via a new sidechain, expanding its functionality beyond basic transactions to include complex applications like decentralized exchanges and token issuance.

This development includes the use of the Axelar network for cross-chain token transfers, with Wrapped XRP (eXRP) acting as the primary token on this sidechain, facilitating broader interoperability and developer engagement.

Ripple will soon add Ethereum-compatible smart contracts to the XRP Ledger using sidechain networks in a move that boosts the fundamentals of the closely related XRP token.

Smart contracts are programs that automate the actions required in a blockchain transaction, allowing for features beyond mere transactions, such as issuing tokens, processing trades, and creating decentralized exchanges and financial applications.

“Progress towards smart contract functionality is already underway in the XRP Ledger ecosystem with the XRPL EVM sidechain,” Ripple said in a release Monday. “This sidechain will bring Ethereum Virtual Machine (EVM) compatibility to the XRP community, allowing developers to employ familiar tools and programming languages, thereby broadening the XRP Ledger’s appeal to a global developer community.”

XRP Ledger is an open-source blockchain network that uses xrp tokens to process and record financial transactions. Ripple first started testing a way for developers to deploy smart contracts made for Ethereum on the XRP Ledger (XRPL) blockchain in 2022.

Ethereum Virtual Machine (EVM) is the software that runs smart contracts on Ethereum. A sidechain is a blockchain that runs parallel to a main blockchain (XRP Ledger in this case).

The XRPL EVM sidechain will use the crypto bridging service Axelar to allow users to transfer tokens between itself and 55 other blockchains. Wrapped XRP (eXRP) - a representation of XRP on other networks - will serve as the native asset and gas token on the sidechain.

Source : CoinDesk - Sep 3, 2024