Expanding the potential of XRPL with the XRPL EVM

Expanding the potential of XRPL with the XRPL EVM

Since its inception, the XRP Ledger network has been recognized for its speed, low transaction costs, and reliability, primarily focused on solving efficient payments and settlements.

For many years it has remained a leading network thanks to the excellence achieved in these pillars, which are still widely used today. However, as blockchain technology has evolved, the demand for more programmable and flexible solutions has arisen. In this article, we will explore how the upcoming XRPL EVM sidechain (https://www.xrplevm.org/) can strategically contribute to extending and expanding XRPL's leadership in the years to come.

A Brief History of Blockchain

Today there are hundreds or thousands of blockchain networks, but only a subset of them have marked a step forward in the development of the technology. Bitcoin was the first of these, allowing a decentralized permissionless network for P2P payments. The XRP Ledger was the next to raise the stakes by allowing these payments to be made much more efficiently, cheaply and quickly with complete security, whilst allowing for some flexibility in programming these actions.

While XRPLedger covers most of the most relevant use cases very efficiently, a large and growing tail of use cases and customizations were unsupported and over a period of time we saw an increasing number of forks and similar networks launched to support their own use cases.

This era was marked by a broad debate in the community that @VitalikButerin described in his blog post as “On Silos” (https://blog.ethereum.org/2014/12/31/silos).

Shortly after, @Ethereum was launched as the first network to capitalize on this demand, creating a general purpose network. This general purpose network was fully programmable and would allow all custom use cases to be built on top of it, once again unifying the crypto ecosystem on a global computer.

For a significant time Ethereum achieved these goals, hosting virtually all relevant applications and on-chain activity beyond buying and selling assets on CEX. However, it quickly began to have scalability issues as the number of transactions was limited, which led to a significant increase in fees to the point of ridiculousness where to send a few dollars you had to pay a fee x20 or x30 times greater than the amount sent.

Although programmability was solved, a new problem had arisen: Scalability. @0xPolygon was one of the main networks to capitalize on this new problem, proposing scalability through L2. Scalability in blockchain is usually encapsulated in the well-known "Blockchain Trilemma: Security, Scalability, Decentralization". It is very difficult to improve scalability without compromising security and decentralization, non-negotiable aspects in the construction of the new Internet of Value.

By using L2, we can keep the main network intact in terms of these features, taking advantage of its programmability to verify and create the base infrastructure of the internet, encouraging expensive use of its resources for this infrastructure or some high-value use cases, and delegating most of the lower-value transactionality to L2 for scalability. A similar approach was followed by Bitcoin with the Lightning Network, opening offline P2P payment channels and sealing their value by closing the on-chain channel.

Once it was assumed that the future was going to be multichain, a new race began: interoperability. If we start to have a growing number of specific- or general-purpose L2s, we quickly start to see ourselves in a fragmented ecosystem again, both in users and liquidity.

One of the leading networks that anticipated this new problem was @Cosmos, which created an ecosystem around the @CosmosHub that allowed the launch of multiple "appchains" that used the same @Cosmos_SDK and an advanced interoperability protocol, the famous Inter-Blockchain Communication Protocol (@IBCProtocol). From this same perspective, other networks such as @Axelar (which is based on Cosmos SDK as well ) build interoperability protocols between networks.

So, how is the XRPL EVM strategically important for XRP?

The XRPLedger network has maintained a significant lead over all these years thanks to its flexibility, efficiency, resilience, and security. However, the demand for custom use cases has grown so significantly over these 12 years that it forms a very large part of the demand for blockchain networks that cannot be ignored.

@Ripple announced a very important move in this direction, by developing the XRPL EVM sidechain and by incorporating programmability into the XRPL Mainnet (https://ripple.com/insights/expanding-programmability-on-the-xrp-ledger/).

In this context, the XRPL EVM sidechain promises to be a highly important strategic solution complementary to the XRPL main network to ensure the leading position of the XRP Ledger in the coming years, since it has the potential to contribute widely in these very important areas that we have seen:

On Programmability

In terms of programmability, it allows to cover the gap that exists regarding the very high demand for EVM programming, the most used standard in the blockchain world. All of this offered by its native asset XRP, which will be used to pay the XRPL EVM network fees, deployment and execution of contracts. XRP is currently the 3rd largest asset by market cap and one of the most liquid, secured by the XRPLedger network for more than 12 years. This makes it a very desirable asset for applications that want to combine it with their product based on EVM smart contracts. This programmability also has the potential to combine very well with the programmability in development on L1, which was recently published in this article (https://dev.to/ripplexdev/a-survey-of-vms-for-xrpl-programmability-eoa).

On Scalability

In terms of scalability, the XRPL EVM is going to play a fundamental role. As the XRPLedger network becomes increasingly successful and in demand with its new programmability, it may soon encounter the same scalability challenges as Ethereum. Having a well-positioned L2 network like the XRPL EVM allows us to anticipate this problem and offer a horizontal (and potentially vertical) scalability infrastructure to the XRPL network, allowing for a greater number of use cases, programming languages, and ultimately demand for XRP to meet a greater number of needs.

On Interoperability

Regarding interoperability, it will also play a key role. A large number of current successful interoperability protocols are based on EVM, for the simple reason that most L2s are based on EVM. Thus, the XRPL EVM has significant potential to achieve broad interoperability from the start and offer this compatibility for XRP, which will allow this asset and other XRPL assets to be exposed in the other ecosystems while also allowing a large number of assets to be brought onto the XRPL mainnet, which has a top-level native DEX that could see its usage and volume significantly increase with the presence of a greater number of high-demand assets. Furthermore, the XRPL EVM sidechain is based on Cosmos SDK so it natively inherits interoperability with IBC, which automatically connects it to the entire ecosystem.

A Unified Vision for Growth

The introduction of the XRPL EVM promises to extend the capabilities and ties of the XRPL mainnet in complement to its rapid development in terms of programming, interoperability and scalability, creating a much broader, scalable and strategically prepared unified ecosystem to face the rapid changes and market demand that we have historically experienced.

Currently, the network is in its final stage of the Devnet, where part of these hypotheses have been largely verified by its success: Almost 1 million transactions, more than 60 thousand addresses, more than 1000 tokens, tens of thousands of smart contracts and more than 50 completed amendments show great interest from the XRPL community in the Devnet stage. The @RippleXDev, @Axelar and @Peersyst teams continue to work towards an imminent launch of the Testnet network, which will be the prelude to the final launch on Mainnet.

In conclusion, the XRPL EVM is more than just a sidechain; it is a vital component of XRPL’s strategic vision, designed to secure its position as a leading blockchain platform in the years to come.

Links If you want to stay up to date with these developments, feel free to follow @RippleXDev and @Peersyst on X.

You can also check out the latest docs (https://docs.xrplevm.org/) and join the Discord community (https://discord.gg/xrplevm/)