ripple Confirms that united side chains are coming. The implementation will significantly increase the use cases of XRP Ledger, including the addition of DeFi, NFT, and smart contract capabilities.
“You asked, we listened. We have introduced united side chains to # explorer So you can enjoy the power #XRPL On a side chain that acts as its own #blockchain. Learn about new use cases like a mother # Davy Capabilities and smart contracts. “
While the company maintains that cross-border payments remain its “bread and butter,” standardized side chains will open up a world of possibilities for Ripple to go in the future.
Moreover, speculation is growing that Ripple is eyeing a bigger prize. Namely, the use of side chains to capture the central bank digital currency (CBDC) market.
Ripple CTO Explains Why Side Chains Are Necessary
In a recent interview with the Thinking Crypto YouTube channel, David Schwartz, CTO at Ripple, explained the standardized side chains as follows:
“The general idea is to enhance the usefulness of the XRP Ledger by having essentially additional ledgers of this type, literally, on its side.”
The thinking behind this concept is to separate functions across different chains. In this way, the main chain, which is used for payments in the case of Ripple, remains fast and cheap to use.
“If you try to put everything in one chain, what happens is the chain becomes slow and becomes expensive, and it degrades people’s ability to use it for simple payments.”
Schwartz said they could have built smart contracts and so on, on the main chain. But neither he nor the XRP community would have accepted that because being the “best digital asset for payments” really matters.
Central bank digital currency
Ripple announced a pilot project for CBDCs in March of this year. This project is based on the XRP Ledger, which has more than eight years of history as a reliable, secure and highly scalable payment system.
However, in catering to central banks, it also offers transaction privacy and more control than a standard public ledger.
What is most interesting is the interoperability aspect of this project. Ripple says that these private ledgers are able to communicate with existing legacy infrastructure, as well as with each other.
This presents an interesting possibility when considering cross-border settlements that occur on the same network via side chains.
“We are also working on a new approach whereby central banks will be able to join a network of CBDC ledgers that enable full settlement interoperability, while allowing each member to retain their monetary and technological independence.”
Although today’s announcement didn’t mention central bank digital currencies, it’s hard not to combine two and two together.
Featuring a summary of the top daily stories in the worlds of Crypto, DeFi, NFTs, and more.
Get edge In the crypto-asset market
You can access more coding insights and contexts in every article as a paid member of CryptoSlate Edge.
Join now for $19 a month DISCOVER ALL THE BENEFITS