Ripple Is Adding Ethereum-Compatible Smart Contracts to the XRP Ledger via a New Sidechain

This will boost its capabilities beyond simple transactions to accommodate more complicated applications such as decentralized exchanges and token issuance.

Ripple is adding a new sidechain to the XRP Ledger that will support Ethereum-compatible smart contracts. This will expand the capabilities of the XRP Ledger beyond simple transactions to include more complex applications like decentralized exchanges and token issuance.

The development also includes the use of the Axelar network for cross-chain token transfers to promote interoperability and developer involvement. Wrapped XRP, or eXRP, will serve as the native currency on this sidechain.

In a move that is bound to garner mixed reactions from the XRP coin’s community, Ripple is set to introduce sidechain networks that will bring support for Ethereum-compatible smart contracts to the XRP Ledger.

The CEO addressed the varying reactions from members of the digital asset community to Ripple's announcement of another change in customization for the ‘builders, entrepreneurs and users’ in the X post by integrating smart contract capability into the XRP ledger.

This led to a discussion on the platform about whether Ripple is the only driving force in the XRP ecosystem and whether the community will have a say in the matter. Schwartz stated that Ripple's plan is to keep the XRP Ledger the same.

Smart contracts are programs that automate the processes needed in a blockchain transaction to enable functionality beyond simple transactions, like token issuance, trade processing, and the creation of decentralized exchanges and financial apps.

“Progress towards smart contract functionality is already underway in the XRP Ledger ecosystem with the XRPL EVM sidechain,” Ripple said in a statement on Monday, adding:

“This sidechain will add EVM compatibility to the XRP community, where developers can use the existing tools and coding languages to expand the appeal of the XRP Ledger to developers across the world.”

The XRP Ledger is a public blockchain platform that uses XRP tokens to power financial transactions. In 022, testing of the smart contract deployment powered by Ethereum on the XRPL was already possible.

The Ethereum Virtual Machine (EVM) is a tool that handles the execution of smart contracts on the Ethereum platform. A sidechain is an additional blockchain that is built alongside the main chain, in this case, the XRP ledger.

Enhancing the Network's Programmability

With the introduction of native smart contract capabilities on the XRP Ledger (currently in the research phase) and the upcoming debut of the Ethereum Virtual Machine (EVM) sidechain (expected to go live in the next few months), Ripple is set to enhance the programmability of the blockchain network.

According to Ripple CTO, instead of presenting a “fully baked” proposal to the crypto industry and the XRP community, Ripple has been transparent with its plans. The American fintech firm aims to remain transparent and inform its community and shareholders where it plans to allocate resources and has also outlined its priorities.

Schwartz explained the abrupt shift in the company's goals, stating that Ripple initially thought that XRPL would be drastically changed by the main net's ability to be programmed. As a result, the business had to develop the EVM sidechain.

However, after hearing from several people and receiving feedback from the crypto industry, Schwartz concluded that “programmability makes sense for Mainnet much earlier.