How it worksThe Decentralized Finance (DeFi) space has brought on an increased demand for smart contracts. Since 2019, the number of DeFi developers has grown 110%.
According to a blog by Ripple team, the new feature that will enable smart contracts is called Federated Sidechains.
Federated Sidechains is a sidechain to XRPL (Ripple’s decentralized public blockchain) and will enable developers to build smart contracts, a DEX and allow for DeFi. The Federator software will act as a bridge between Sidechain and the XRPL. Each sidechain will have its own ledger and transactions. Thereby allowing sidechain issued tokens, like CBDCs to move between sidechains.
Ripple’s native token, XRP will be used to run the sidechains on XRPL. Any application built on the sidechains can issue their own tokens that are compatible with XRPL. These new tokens, referred to as Federated Assets will trade on the XRPL DEX.
XRPL’s Federated Sidechains could be available in the coming months, according to David Schwartz, Ripple’s Chief Technical Officer.
Smart contracts like none otherThis new development is very bullish for XRP and has the potential to make XRPL one of the most powerful blockchains. For the simple reason that countries can issue Central Bank Digital Currencies (CBDCs) on XRPL. Governments, banks, central banks, financial institutions and others can use XRPL to operate digital money and financial products. This is not just another smart contract launch.
Other tokens who have enjoyed immense success by enabling smart contracts on their blockchains, are Polkadot (DOT) and Cardano (ADA). Similar to XRPL’s proposed Sidechain, DOT has parachains that allows for the integrating of smart contracts. ADA’s Alonso upgrade that will enable smart contracts, is said to launch on 12 September 2021.
Perhaps these and similar projects have motivated Ripple to do the ‘smart’ thing and bring smart contracts to users.
Ripple SEC lawsuit updateIn December 2020, the SEC started legal action against Ripple Labs. The SEC alleged that XRP is a $1.3 billion unregistered securities offering.
The latest development is that Ripple filed a motion to compel the SEC to disclose its internal cryptocurrency trading policies. The motion aims to bring clarity to a concern about whether or not the SEC permitted its own employees to trade XRP. According to a recent media report, the court instructed the SEC to respond to the latest motion by 3 September.
In conclusion, XRP is one token that has not yet surpassed its previous all-time high. Be sure to hold a bag of XRP before it eventually reaches a new all-time high.