XRP also interested in DeFi? Ripple CTO unveils vision of "Federated Sidechains" to introduce smart contracts to the ecosystem

Ripple's Chief Technology Officer, David Schwartz, released an article today announcing the vision of a "federated sidechain" network based on the XRP Ledger system, aiming to introduce the promising decentralized finance (DeFi) into the XRP ecosystem.

Trade-offs between Functionality and Efficiency

While the XRP Ledger boasts high transaction processing speeds, its network is "non-Turing complete," lacking smart contract functionality, making it unsuitable as a foundational network for decentralized application development. To prevent the transaction processing speed of the XRP Ledger from being affected, Ripple has been reluctant to introduce smart contract functionality to the network.

However, David Schwartz, the Chief Technology Officer of Ripple, released an article today unveiling his vision for developing a "Federated Sidechains" network based on the XRP Ledger system, aiming to introduce the promising decentralized finance (DeFi) to the XRP ecosystem.

.@Ripple CTO @joelkatz unveils his vision for federated sidechains on the XRP Ledger for which developers and XRP community members are invited to review and provide feedback. https://t.co/qcp5Ulgv2X

— RippleX (@RippleXDev) June 7, 2021

Schwartz stated that introducing smart contracts to the ecosystem through sidechains can create more application scenarios while ensuring that the underlying network's transaction processing speed remains unaffected:

"We propose a win-win strategy of 'Federated Sidechains for the XRP Ledger.' This will enable developers to implement new features, such as native smart contracts that seamlessly interoperate with XRP and the XRP Ledger, while allowing the XRP Ledger to maintain its current high efficiency."

XRP Federated Sidechains

In the article, David Schwartz explained that anyone can build sidechains based on the XRP Ledger, and each sidechain operates independently. Developers can customize the functionality and consensus mechanism of the sidechain network. However, to interact with the XRP Ledger or other sidechains, such as for "asset cross-chain" transactions, verification of transactions on both networks must be synchronized through a "Federator."

Moreover, since only minimal modifications are required for the XRP Ledger to implement Federated Sidechains, the risks to the system from developing this feature are relatively low.

Schwartz invited community developers to provide feedback on this project, emphasizing that Federated Sidechains will facilitate the horizontal expansion of the XRP ecosystem, allowing community developers to extend various applications or functionalities around the XRP Ledger.