Customers Demand, Ripple Delivers with Sidechains

With customers demanding more and better smart contract functionality, payment platform Ripple is poised to deliver it.

The go-ahead company is planning to introduce sidechains, to ease the implementation of smart contracts adjacent to the XRP Ledger.

What are Ripple customers asking for?

Ripple developers are working on expanding the XRP Ledger, or XRPL, in line with customer requests to make smart contracts simpler and more efficient. They are doing this by creating federated sidechains.

What is a federated sidechain?

Federated sidechains are parallel ledgers that support the specialist interest and experimentation of developers, in both DeFi and other use cases.

Sidechains helps streamline the main XRPL, while also expanding functionality and interoperability of the wider XRP ecosystem.

How does this work in practice?

Ripple developers are designing a piece of ‘federator’ software. This connects at one end to the XRPL Mainnet, and on the other end to one or more sidechains.

While each sidechain can function as its own blockchain, they will all use XRP as their main asset. This federation system will also facilitate transfer of XRP and issue tokens to and from the main ledger.

So, each sidechain can choose XRP as its native asset, or have its own, new, dedicated asset.

Every sidechain would also have a trust account on XRPL Mainnet, holding user assets and accessible via a multisign or threshold key.

What does this mean for the bigger federated picture?

As Ripple Chief Technology Officer David Schwartz says, the federated system offers several user advantages.

  • Low-risk approach
  • Capacity for horizontal scaling
  • Simple support for new blockchain experimentations

There is also longer-term potential to accommodate user feedback and develop new tools to keep the ledger “lean and efficient”.

According to Schwartz, Ripple had previously held back on accommodating smart contract capabilities. The company hadn’t wanted to risk compromising payment focus.

However, ongoing DeFi growth has spurred Ripple on to implement native smart contracts that fully interact with XRP and the XRP Ledger. Security is safeguarded by sidechains acting as their own blockchain.

Photo by Kelly Sikkema on Unsplash


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