Ripple continues to develop its ecosystem as it announced a new development. This new development is likely to push the XRP Ledger (XRPL) as a competitor to ETH and BSC in the smart contract space – XRPL plans to enable smart contracts on XRPL.
David Schwartz, Chief Technology Officer (CTO) at Ripple revealed the feature to the public while sharing his insights on June 7. This new feature is called conjugated side chains. This new addition is very useful for the cryptocurrency community as they will be able to sidechain to XRPL easily.
The main focus of the unified sidechain is to allow developers to implement more cool features such as smart contracts. Furthermore, XRP developers will also have the opportunity to conduct side-chain trials while utilizing the full power of XRPL.
The rapidly growing space of decentralized finance (DeFi) and the popularity of smart contracts are the main reasons behind the introduction of Federal Sidechain.
Furthermore, David also mentioned that the software name Federator will act as a bridge between Sidechain and XRPL. This concept would allow each side chain to have its own ledger and transactions, as well as a union system that would allow XRP and issued side tokens (BTC, fiat, CBDC) to move from one side chain to another.
XRP will be used as the original token to run the main XRPL as usual. In addition, XRP can also be used as a native token to run on the sidechain, or an app built on the sidechain may also choose to issue its own tokens that are compatible with XRPL – these new tokens should be called Standardized Assets. The consolidated assets imported into XRPL itself will be traded on XRPL’s Decentralized Integrated Exchange (DEX). The imported XRP will be used for liquidity sidechain on the integrated DEX XRPL as well.
This is somewhat similar in nature to other smart blockchains such as DOT calling their own sidechains parachains. The massive demand for the imminent launch of DOT parachains may have given Ripple the impetus to do their own side business.
Even Cardano (ADA) is upgrading its blockchain to enable smart contracts. In order to survive and thrive, Ripple sees the need to innovate and improve on XRPL.
Allowing side chaining on XRPL opens up a wave of new opportunities that XRPL in its previous form could not take advantage of, and is in fact more powerful for XRPL than any other blockchain. For example, countries will now be able to issue Central Bank Digital Currency (CBDC) on XRPL. With XRPL being the most adopted ledger among financial institutions, getting the sidechain upgrade will allow banks, financial institutions, central banks and even governments to issue bank-issued tokens, central bank digital currencies or other forms of digital money and financial products on XRPL. Thus, this upgrade is more important than it might seem at first glance. It could push XRPL to become the most powerful blockchain due to the good relationship with the banks that Ripple took years to build.
Hence, this additional side feature is very exciting news for the XRP token as this will create new demand for XRP. Expect XRP to rise in the crypto rankings once this additional feature is deployed. However, the upgrade is still in the consultation phase with the XRPL developers and will need the XRPL validators to approve before the developers can even start working on it. Usually, if a modification proposal has an approval rating of 80% or more for two weeks, it will be activated. I have no doubts that this upgrade will be approved as it is extremely beneficial to everyone in the XRPL ecosystem.
If XRPL gets the approval going forward, the price of XRP could rise again, just as the ADA token did after the Cardano blockchain decided to implement the smart contract capability.
While the SEC lawsuit was keeping the price of XRP low, another event limiting the price of XRP was the ongoing sale of XRP by Jed McCaleb, the former chief technology officer of Ripple who received 8 billion XRP. Jed has been selling XRP since 2014 and has been very aggressive in offloading his XRP stock over the past few months. In May alone, Jed sold over 400 million units of XRP and continues to sell at the same pace.
However, the good news is that Jed has only about 600 million units of XRP left, and he will run out of XRP for sale by August if he sells at the same price as it did in May. This means that pressure on the price of XRP will increase significantly in August. With the outcome of the SEC lawsuit expected to come out in August as well and the side-chain vote to be completed (and likely approved) by July, the next two months could be just right for the price of XRP.
The current lawsuit with the SEC has caused a huge drop in media coverage on XRP, to the point that even important news such as the blockchain upgrade has not been shown in most crypto media. The only place to write about the proposed upgrade is the Ripple blog. Hence, investors may want to take advantage of the current market decline to accumulate XRP as the price continues to weaken and the market remains completely unaware.
About Kim Chua, PrimeXBT Market Analyst:
Kim Chua is an institutional trading specialist with a proven track record of success spanning across leading banks including Deutsche Bank, China Merchants Bank and more. Chua later launched a hedge fund that has consistently generated triple-digit returns for seven years. Chua is also an educator at heart who has developed her own trading curriculum to impart her knowledge to a new generation of analysts. Kim Chua actively follows the cryptocurrency and cryptocurrency markets closely and is keen to find future investment and trading opportunities as the two very different asset classes begin to converge.
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