Ripple's digital token, XRP, and Ethereum now share a vital resource, a situation that could bolster XRP's bullish forecast. Here's a rundown of the reasons.
XRP Launches Ethereum Virtual Machine (EVM) Sidechain, Attracting Developers and Boosting Long-term Growth
In a significant move, the XRP Ledger (XRPL) has launched an Ethereum Virtual Machine (EVM) sidechain, providing full Ethereum-compatible smart contract support to the XRP universe. This development is expected to have substantial long-term implications for the growth, adoption, and utility of XRP.
The EVM sidechain enables Ethereum-native applications to run on the XRP Ledger with significantly higher speed (4-second finality) and lower fees (~$0.0001) compared to Ethereum’s mainnet. This compatibility has already attracted over 1,400 smart contracts to launch within the first week, demonstrating strong developer interest and signaling ongoing growth potential.
With the new sidechain, XRP serves as the native gas token to pay user fees, while a bridge protocol is used to ferry assets between the sidechain and XRPL's main net. This expansion of XRP's utility supports decentralized finance (DeFi), gaming, and tokenization of real-world assets (RWA), including institutional use cases with partners like Deutsche Bank.
The sidechain also preserves XRPL's ultra-cheap, near-instant payment rails and compliance features, while insulating the core network from heavier computation and potential exploits that come with generalized smart contracts. This makes XRPL an attractive platform for developers, offering lower fees, easier onboarding, and a fresh user base.
The launch provides a new fundamental pillar for long-term bullish theses on XRP. If a modest 5% of Ethereum's developers decide to work on XRPL EVM, it would result in approximately 293 new developers on XRPL. This increased developer activity is expected to lead to more apps, users, transaction fees, DeFi projects, and ultimately more demand for the native token used to pay fees.
If a significant portion of Ethereum's developers shift to XRPL, the ecosystem's growth curve could steepen sharply. As of late July, the Ethereum ecosystem had approximately 5,866 monthly active developers, while XRPL's community was around 2,800 active contributors as of June. Every engineer working on XRPL's EVM is one less full-time builder working on Ethereum projects.
The EVM sidechain incorporates proof-of-authority consensus and compliance-ready infrastructure, attracting institutional players and fostering a flywheel effect of long-term value creation by bridging legacy finance and decentralized protocols. The sidechain also enables multi-chain interoperability and liquidity through integration with Axelar interoperability, allowing XRP to operate across more than 60 blockchain ecosystems without intermediaries.
In conclusion, the EVM sidechain and Ethereum developer community integration create a virtuous cycle of increased developer activity, application diversity, institutional participation, and utility growth. This sets XRP on a trajectory for sustained long-term expansion and enhanced market relevance. For prospective buyers, the launch offers a new and quantifiable reason to start nibbling.
- The launch of the Ethereum Virtual Machine (EVM) sidechain on the XRP Ledger could potentially attract a significant portion of Ethereum's developers due to its lower fees and faster transaction speeds, influencing a shift in focus that may boost the development of XRP.
- As more developers join XRP's EVM, they could contribute to the creation of numerous apps, DeFi projects, and other applications, increasing transaction fees and demand for the native token used for payment.
- The EVM sidechain strategically positions XRP as a compatible hub for various decentralized finance (DeFi) applications, technology-driven projects, and institutionally oriented partners, providing a fresh investment opportunity for prospective buyers.
