cryptoglobe.com
The development of an Ethereum Virtual Machine-compatible sidechain for the XRP Ledger, the native network of the $XRP token, could be “very bullish” for the cryptocurrency, as it has been for some of its competitors.
According to the pseudonymous analyst known as Guy, who shared his thoughts on a YouTube video to his over 2 million subscribers on the Google-owned video-sharing platform, the move could help the price of XRP surge as support for the Ethereum Virtual Machine and its smart contracts “sent many Ethereum competitors to the moon in the past, including Harmony and Fantom.”
The analyst added that the “XRP having an EVM sidechain could, therefore, be very bullish for XRP,” although how bullish will depend on “how fast XRP’s EVM sidechain would be.”
Guy added that the EVM is “inherently limited” to a few hundred transactions per second, although he does not believe the limit consists of a significant hurdle for Ripple, which will “have a lot of work to do to improve its TPS.”
Per his words, it shouldn’t be hard for the fintech firm to scale the sidechain, as Avalanche, NEAR Protocol’s Aurora Layer, and Solana’s upcoming Neon layer “leverage the EVM and can process thousands of transactions per second.”
As CryptoGlobe reported, a firm called Peersyst has developed a sidechain for the XRP Ledger to allow developers to bring Ethereum smart contracts to it while lowering the entry barriers for developers wanting to create new applications on the network.
Peersyst’s new sidechain is compatible with the Ethereum Virtual Machine and builds on thoughts introduced by Ripple CTO David Schwartz, who suggested introducing EVM compatibility to the XRP Ledger. The move means developers can easily access XRP Ledger’s features, including its speed and low-cost transactions.
To Guy, Ripple’s sidechain has a significant advantage over other EVM-compatible chains, which is its “massive community of XRP holders.” The analyst added there’s a disadvantage, however:
That said, XRP does have one big disadvantage, and that’s that it’s the only big cryptocurrency that’s been singled out as being a security by the SEC as part of its case against Ripple and co.
The U.S. Securities and Exchange Commission (SEC) sued Ripple and two of its executives in 2020, alleging they sold unregistered securities when they issued $1.3 billion worth of XRP tokens. Ripple denies XRP is a security.
The price of XRP soared last month after reports revealed that both Ripple and the SEC were looking for a ruling in their long-running legal battle through a so-called summary judgment.
Notably, XRP-focused investment products saw $800,000 of inflows last week, which are relatively small compared to BTC’s $4.6 million in inflows over the same period, but represent “the largest since the lawsuit with the SEC began.” The inflows suggest investors are confident the case will soon be settled.