Ripple Labs is making significant strides with a new initiative allowing decentralized finance (DeFi) developers to build Ethereum-based applications on its XRP Ledger. Emphasizing a multi-chain future for blockchain, Ripple introduces Ethereum Virtual Machine (EVM) compatibility to its network. This move stems from the XRP Ledger’s developer community’s demand for cross-chain compatibility with Ethereum. As a response, Ripple is set to launch the XRPL EVM sidechain, facilitating EVM compatibility on the XRP Ledger.
The new XRPL EVM sidechain aims to broaden the opportunities for developers, particularly in Real World Asset tokenization. DeFi developers can leverage XRPL’s enhanced interoperability to foster innovation, extending the network’s utility and reach. Ripple’s plan involves connecting the XRPL EVM sidechain to the XRPL mainnet, a process necessitating a bridge to enable seamless asset transfers between the mainnet and sidechain.
Ripple has chosen the Axelar network to provide the necessary security for this bridge. Axelar’s decentralized bridge will ensure efficient transaction processing and robust interoperability by sourcing native gas tokens for the XRPL EVM sidechain. This bridge isn’t limited to XRP Ledger alone; it can serve over 55 other blockchain networks, further promoting interoperability across the blockchain ecosystem. Ripple is confident in Axelar’s capability, given its validator network and proven track record with platforms like Uniswap and Microsoft.
Collaboration has been key to Ripple’s progress. The engineering team at Ripple has worked closely with Peersyst, a partner whose CEO, Ferran Prat, supports the interoperable blockchain initiative. Prat highlighted Axelar’s readiness and compatibility for bringing wrapped XRP (eXRP) as a native currency to the XRPL EVM sidechain. Peersyst is currently working to transition the main bridge to Axelar for the development network (devnet), signaling a significant step forward in this initiative.
The move towards a single bridge solution, as opposed to multiple ones, marks a strategic choice by Ripple Labs. By using Axelar for various cross-chain smart contracts and transactions, Ripple aims to streamline the process, avoiding the complexities that multiple bridges could introduce. This approach is expected to enhance security, efficiency, and user experience on the XRP Ledger.
Earlier this year, Ripple outlined its ambitious plans for DeFi on the XRP Ledger. The platform aims to create a robust financial ecosystem by integrating essential elements like issuance, value transfer, exchange, and credit facilities. Among its proposed features are an Automated Market Maker, decentralized identifiers (DiDs), Oracles, Multi-Purpose Tokens (MPT), and an XRPL-native Lending Protocol. These components are at different stages of development, indicating Ripple’s ongoing commitment to evolving the financial landscape.
Despite the ongoing legal challenges with the U.S. Securities and Exchange Commission (SEC), Ripple remains focused on innovation. The firm has faced regulatory scrutiny, but this hasn’t deterred its pursuit of new technologies and solutions. Ripple’s proactive stance is evident in its recent announcement of a stablecoin launch, reflecting its efforts to stay competitive in the rapidly growing crypto industry.
Ripple’s strategic initiatives underline a broader vision for blockchain technology’s future. By enabling EVM compatibility and fostering a multi-chain ecosystem, Ripple is positioning itself as a pivotal player in the DeFi space. This development not only aligns with the demands of the developer community but also sets the stage for further advancements in blockchain interoperability and utility. As Ripple continues to navigate regulatory landscapes and technical challenges, its innovative approach promises to contribute significantly to the evolution of the digital finance sector.
