While the XRP community remains focused on deciphering the developments in the Ripple vs SEC lawsuit and reacting at every step of the way, the Ripple team has been trailblazing and working on improving their product to welcome mass adoption even as the outcome of the lawsuit remains unknown (although more positively skewed towards Ripple). One such new development that could help XRP gain adoption is the EVM compatibility of one of the side-chains of the XRP Ledger, which was announced by Ripple Chief Technology Officer David Schwartz last Monday, 17 October. According to Schwartz, the new sidechain is already in its testing round and several EVM developers are already trying out the chain themselves.
The XRP sidechain EVM compatibility has a three step improvement process which will make it even better with time. The second step of this project is expected to take place early 2023, which will make the chain permissionless and improve its scalability to achieve block times similar to that of the XRP Main Ledger, i.e. around 1,000 transactions per second. The final stage is phase three where the EVM sidechain becomes permissionless and has a cross-chain bridge to enable the seamless transfer of XRP and other crypto assets between the EVM-supported sidechain and the XRP Main Ledger.
All that said however, once the first step is complete, the sidechain will already be EVM compatible and ready for use.
As our readers may not be too familiar with what EVM compatibility means, we shall explain it in simple terms in this article. Please read on to find out more.
What is EVM Compatibility?
First of all, we need to know what is EVM. EVM is known as the Ethereum Virtual Machine, which is the runtime environment that executes Ethereum smart contracts. Ethereum contains its own Turing complete scripting language called Solidity, and with this comes a need for a program to be able to execute this code. EVM is designed specially to do this task.
Thus, being EVM compatible simply means having the ability to write and deploy smart contract code that is compatible with the EVM and can therefore be recognized by the Ethereum nodes.
This also means that XRP users would be able to interact with Ethereum compatible decentralized applications (dApps) in the future. Imagine being able to access an XRP version of popular dApps like Uniswap or Pancakeswap and Web3 wallets such as MetaMask and XUMM Wallet in future and being able to swap assets seamlessly between them.
Why is EVM Compatibility Important?
As we are all aware by now, Ethereum is the first smart contract blockchain that has been around the longest time and thus, has the most number of applications as well as developers that have worked on it and are still writing codes on EVM. Should XRP Ledger become EVM compatible, it allows for the easy replication of these applications onto the XRP Ledger without developers having to relearn new XRP coding language and rewrite the codes on XRP Ledger in order to make similar applications run on XRP. This enables XRP Ledger to gain access to EVM’s large arsenal of experienced developers to build on XRP. When more developers build applications on XRP, the usage of XRP in applications will increase and adoption will gain steam.
This move is an important step for Ripple’s foray into the consumer world as the team's focus thus far has been on an institutional level, creating demand for XRP from financial institutions via its XRP ODL platform. By making XRP Ledger EVM compatible, it shows that the Ripple team is now moving into the consumer market segment, which has been the main driving force of crypto adoption for the most highly valued blockchains in the market today.
Being EVM compatible has helped many popular Layer 1 blockchains like BNB Chain, Solana and Fantom become highly successful within a short period of time by reducing the barriers to entry for application developers to deploy smart contracts on these newer chains due to the code being compatible with the Ethereum network.
It certainly looks like Ripple is targeting this part of the market segment next as an addition to its hugely successful institutional adoption via the ODL. Being successful both on the institutional as well as retail market segment could propel XRP into one of the top crypto contenders in time to come.
According to RippleX software engineer Mayukha Vadari, making XRP Ledger compatible with EVM means that developers will no longer have to choose between XRP Ledger or EVM compatible blockchains. They will now be able to access XRP Ledger’s fast but low-cost transactions and bring Solidity-based smart contracts onto the XRP Ledger, which is a win-win situation for all.