XRP Ledger has been one of the most notable blockchain in the last four years after the network expanded to a lot of different countries to help the governments of those countries and some local business process transactions.
Sadly, even though the Ledger itself is innovative and has multiple differences from a regular blockchain that made it so advanced, it is still not enough to accommodate the innovations that are rapidly happening in the crypto space.
Because of this, many developers who are enthusiastic about the growth of the XRP Ecosystem have created innovations of their own, one of which is the existence of Side Chains, but what does it really do?
What Does a Side Chain Do?
Side chains are a blockchain that moves beside the main blockchain to either help process transactions or just co-exists on the ecosystem.
Think of it like a layer two blockchain but the blockchain itself has capabilities to be its own layer one blockchain at the same time.
One of the common examples of a side chain to help better understand how it connects to a layer one blockchain, is the relationship between Ethereum and Polygon.
Polygon is a layer two blockchain for Ethereum, in the sense that the blockchain can help Ethereum process its transactions with lower fees and higher execution speed.
But at the same time, Polygon can exist as its own blockchain for developers to create DApps on top of it and do transactions on top of the Polygon Blockchain.
This is a prime example of a sidechain, which can help the main chain and also be its own blockchain in the overall main chain ecosystem.
The existence of a side chain is especially important when the main chain lacks capabilities of current generation of blockchains where they cannot accommodate innovations that are happening in the crypto space.
Looking at The Xahau Network
One of the examples is XRP Ledger itself, where the blockchain, or Ledger as it is technically more correct, is still lacking some features to accommodate the current innovations around crypto.
XRP Ledger is a blockchain ledger that was created to accommodate faster transactions than the regular financial networks that are used by banks.
It wants to accommodate international transactions so that users who usually use banks do not need to wait days and pay huge fees for international transactions.
Because of this the Ledger does not have a feature that makes it able to host DApps so developers cannot build anything on top of it.
The only smart contract that can be built and used on top of the XRP Ledger is the Escrow contract, which can be used by users who want to lock a sum amount of money before disbursing it for a certain period of time.
This is why the XRP Ledger needs a side chain so that it can accommodate innovations, primarily so that developers can build DApps on top of it, which makes the ecosystem more alive.
Currently there is one popular side chain on the XRP Ecosystem which goes by the name of Xahau Network.
The blockchain promotes itself as a side chain for the XRP Ecosystem, so that developers can use it to launch their own DApps through their own innovation of smart contracts called Hooks.
Xahau Network’s relationship with the XRP Ledger, is similar to Ethereum and Polygon’s relationship, in the sense that Xahau Network can help XRP but also can be its own blockchain.
Because of the Xahau Network, the XRP Ledger can now process more transactions and can host DApps on top of it so the ecosystem grows bigger and bigger by the day.
This makes XRP able to compete with other newer generations of blockchains so it is not out of the race yet to be the best blockchain in the crypto space.
Overall, this article should explain why a side chain is important to some blockchains or ledgers and how the XRP Ecosystem will probably go bigger in the future.
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