Connecting the XRPL (XRP Ledger) to the broader Web3 ecosystem heralds a new exciting era for the network. XRP holders benefit from an entirely new set of DeFi (Decentralized Finance) possibilities, as well as cross-chain functionality. XRP has grown far beyond its own ledger. To compete with these other smart contract platforms, it now connects with more than 80 other blockchains, creating exciting new possibilities for users and developers alike.

This integration is a huge step forward for the XRPL. This lays the foundation for the XRPL to play a key role in the rapidly evolving world of decentralized finance. XRPL integrates with other blockchains, further enhancing its utility. XRPL allows for easy integration with other blockchains. This expansion provides users with a broader set of capabilities to help manage and utilize their XRP holdings in meaningful ways. This next stage of interoperability will onboard a greater number of users and developers to the XRPL ecosystem. It will catalyze even more amazing innovation and growth.

How Axelar and Squid Make it Happen

Two key players are making this cross-chain magic possible: Axelar and Squid. Axelar powers the secure communication network that lets blockchains like Cosmos, Ethereum, and Bitcoin connect and share information. Consider it like the internet for blockchains. Enter Squid. Squid is an easy-to-use API and SDK that is powering easier cross-chain swaps. It allows users to quickly swap tokens across various blockchains with only a couple of clicks. Squid supports the swap as a liquidity and messaging router on Axelar, simplifying these complex cross-chain swaps. Thanks to Squid’s “Squid Boost” feature, these swaps go through in less than a second so the process is super fast and efficient.

This collaboration, combining Axelar’s secure cross-chain connectivity with Squid’s powerful aggregation and routing technology, is key to XRPL’s Web3 ambitions. Axelar ensures that the communication between different blockchains is secure and reliable, while Squid makes the process of swapping assets across chains user-friendly and efficient. Together, they make for a truly seamless experience for XRP holders looking to take their first steps into the world of cross-chain DeFi.

Benefits of Cross-Chain Functionality

Here are some of the benefits:

  • Moving XRP between chains: Users can now move XRP between different blockchain networks, such as XRPL and EVM-compatible chains.
  • Using XRPL assets on other chains: Users can now move native XRPL assets, such as GZX, xBILBx, XList, and NVL, across chains, allowing them to access a broader range of DeFi applications and services.
  • Access to multiple DeFi ecosystems: XRPL users can access multiple DeFi ecosystems, including lending, borrowing, and yield farming opportunities on other chains.
  • Increased liquidity: By enabling the transfer of XRPL assets across chains, cross-chain swaps can increase liquidity and create new opportunities for traders and investors.

You can bridge XRP and other XRPL assets to other blockchains. This capability fully unlocks a whole new world of features, enabling users to do some really amazing things! Today, that’s changed and they can more easily explore DeFi protocols on competing chains. They’re able to tap into new markets and capitalize on investment opportunities that were previously unavailable.

Real-World Examples

Picture this—you initially plan to use your XRP to take part in a yield farming program on Ethereum. This integration allows you to easily exchange your XRP for an ERC-20 token. You can then deposit that XRP into the yield farm and you’ve done it all without leaving the Ripple ecosystem!

Another use case is the instant provenance for NFTs on XRPL without the environmental impact built into other blockchains. If you’re looking to begin, try minting your first NFT using XRPL. Then move it over to another blockchain and sell it on another marketplace.

The XRPL EVM Sidechain

Ripple’s new XRPL EVM Sidechain brings Ethereum virtual machine (EVM) compatibility to Ripple’s ecosystem for building blockchain-based applications. This innovation means that developers can program Ethereum-compatible applications while benefitting from the speed and reliability of XRPL. Yet, this integration presents exciting new opportunities. It combines the best of both XRPL and Ethereum networks, giving developers the tools they need to build exciting new decentralized applications (dApps). The XRPL EVM Sidechain serves as a bridge between XRPL and Ethereum, enabling seamless interaction between the two networks and unlocking more opportunities for users.

The XRPL EVM Sidechain is changing dApp development forever. This gives developers the ability to maximize the strengths of both XRPL and Ethereum. By introducing EVM compatibility to XRPL, developers are empowered to deploy their current Ethereum-based dApps on XRPL with little to no changes. This introduces an entirely new paradigm for dApp development on XRPL.

Benefits of the XRPL EVM Sidechain

  • Access to a broader ecosystem: The integration provides XRP holders with access to a broader ecosystem of decentralized applications (dApps) and use cases, including DeFi protocols, NFTs, and more.
  • Seamless experience for NFTs: The integration enables a seamless experience for NFTs on XRPL without the environmental implications inherent in other blockchains.
  • New possibilities for dApps: The integration creates entirely new possibilities that leverage the unique strengths of both XRPL and Ethereum networks, enabling developers to build innovative decentralized applications (dApps).
  • Interoperability: The XRPL EVM Sidechain serves as a bridge between XRPL and Ethereum, enabling seamless interaction between the two networks and unlocking more opportunities for users.

Security Considerations

Naturally, as with any cross-chain technology, security is the foremost consideration. Axelar addresses this with its Interchain Token Service (ITS), which ensures that asset transfers are secure and that the 1:1 ratio of XRP between the mainnet and sidechain is maintained. Axelar has gone a step further with an Enterprise Threat Model. This model represents the critical first steps to adopt a holistic security program.

Although cross-chain technology has much to offer, understanding the inherent security risks at play is critical. Without going into details, hacks and exploits have already taken place on other cross-chain bridges, some with hundreds of millions of dollars in funds lost. Especially if for DeFi purposes so stick to reputable, well-audited bridges like Axelar. As usual, be extra careful anytime you’re moving assets between chains!

The Future is Interoperable

The ability to interoperate XRPL with more than 80 blockchains through Axelar and Squid, that’s a game changer. This is a huge step toward realizing a more connected and interoperable Web3 environment. This integration enables composability, paving the way for XRPL to play in emerging DeFi sectors such as restaking, one of the world’s fastest growing markets. By interconnecting with 80+ blockchains, XRPL will unlock new markets, users & liquidity — broadening the scope of its DeFi potential.

As the broader Web3 space continues to develop, interoperability will be key to its success. Interoperability between different blockchains is needed so that they can communicate and interact with one another. This capability is crucial to creating a genuinely decentralized and interoperable ecosystem. XRPL’s integration with Axelar and Squid exemplifies this exciting trend. It further cements XRPL’s stature as an innovator and leader in the developing Web3 ecosystem.

Quick, efficient, and low-cost transactions are another big benefit. Bridging from XRPL to the XRPL EVM normally costs under 1 XRP. At just under 3 minutes, it’s a pretty low-risk, low/medium-cost way to explore bridging and get more comfortable using XRP with other on-chain apps. This will empower developers and users to test and play with cross-chain functionality with simple ease. Beyond that, they can look into the numerous DeFi opportunities that exist on other blockchains.