Ripple is proposing a major XRP ledger upgrade that the company says could unlock decentralized finance (DeFi) and smart contracts across the XRP ecosystem without affecting the efficiency of XRPL.
Ripple plans to achieve this through the use of federated sidechains, according to David Schwartz, the company’s chief technology officer.
Schwartz explains in a new blog post that the sidechains would be connected to the XRPL by means of “federators”, which are pieces of software operated by parties who run validators on at least one sidechain. The sidechains would function like their own blockchains, but XRP and tokens issued could move between them and the XRPL.
“This will allow developers to implement new features, such as native smart contracts, that work seamlessly with XRP and the XRP ledger, while the XRP ledger can maintain its existing ‘lean and efficient’ functionality.
Federated sidechains enable experimentation and specialization so that developers can enjoy the power of the XRPL on a sidechain that acts as its own blockchain. Imagine, for example, the potential to move into new functions by reducing the functions of the XRPL to a specific subset for a specific use case – or even creating a private, parallel network for an authorized blockchain. “
Schwartz, one of the original architects of the XRP ledger, adds that successful functions “burned” into the sidechains could eventually be ported to the XRPL mainnet.
However, the CTO notes that enabling sidechains would not require changes that are used on the XRPL itself, although he says some changes to the software would be required.
“These changes are probably the largest part of this effort because even if they are not enabled on XRPL, there is still a risk of changing the software. For example, some of the existing code may have to be moved or adapted, which carries the risk of inadvertent behavior change.
All potential XRPL changes require an 80% approval rating from the ledger’s validators. If a change remains above this threshold for two weeks, it will be activated.
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Featured image: Shutterstock / Suppachai Salaeman