Ripple developers have looked into comments and suggestions to expand XRP Ledger or XRPL to incorporate features like smart contracts.. The latter have become a major feature of the burgeoning DeFi space, but the creators of Ripple claim that a different solution is better for payment-centric XRPL.
This solution comes in the form of so-called “federated sidechains”, that is, parallel ledgers that can support developer experimentation and subject interestsEither for DeFi or other use cases. The use of sidechains allows the main XRPL to remain optimized and efficient while expanding the functionality of the broader XRP ecosystem by providing interoperability for native smart contracts and other functions.
To facilitate this interoperability, Ripple’s creators propose “Federator” software that connects to the XRPL network on one end and one or more sidechains on the other.. Each of them work as their own blockchain network, but they use XRP as their main advantage; In addition, the federation system supports the transfer of XRP and issues tokens between them and the ledger.
Validators who operate at least one sidechain are authorized to run the Federator software. To integrate this new software, according to Ripple, only “two trivial changes” need to be made to the way the XRPL network works. The new functions of the XRPL server software allow you to operate in a sidechain, but these functions are not activated in the mainnet itself. To further describe the Federator software, Ripple’s chief technology officer said, David black, wrote:
“Each sidechain would have a ‘trust’ account on the XRPL mainnet. This account can hold assets in XRPL on behalf of the users of the sidechain.Each sidechain validator operator registers a signature key that signs transactions in XRPL so that the sidechain validators can collectively create transactions to manage the sidechain mainnet account.
Each sidechain can choose to use XRP as their native asset or to have their own new native asset. In the first case, the sidechain account in the mainnet contains your entire XRP inventory in trust for use in the sidechain. In the latter, the sidechain mainnet account can be used to issue the new native asset in the XRPL mainnet.
Schwartz said the advantages of the federated system are its low risk approach, horizontal scalability, and easy support for new blockchain experiments. and a long-term vision that can be adapted to an evolving toolset and continuous feedback on new sidechain developments.
As previously reported, Sidechains have become a popular approach for blockchain developers to test new solutions for solving scale problems and to integrate new functions into established blockchain network ecosystems like Ethereum.