Update: As of December 12 2021, XRPL version 1.8.1 has experimental functionality to support sidechain federators. It is now possible to connect a sidechain to the Mainnet or a test network through servers running version 1.8.1 or higher. See here for documentation on Federated Sidechains on the XRPL.
In addition, the application window for the XRPL Grants Program is now closed, and the link has been removed from this post.
Earlier this year, Ripple shared a vision for Federated Sidechains that can complement the XRP Ledger (XRPL) Mainnet. Federated Sidechains support the developer community by unlocking new capabilities related to smart contracts and DeFi, interoperability, NFTs and more.
Today, an engineering preview of Federated Sidechains that can be used with the XRPL is available for developers to experiment with. Developers are welcome to view and comment on the technical design, as well as leverage this technology to start exploring its potential.
At a high level, each sidechain acts as its own blockchain, while federation enables value in the form of XRP and other tokens to move efficiently from the sidechain to the Mainnet. Federated Sidechains operate without compromising the impressive speed, efficiency, and throughput of the public XRPL Mainnet.
Federated Sidechains create exciting new opportunities for developers. They expand the scope for developers to customize the core, proven XRPL technology to the needs of a specific use case or project. Examples of the kinds of customization enabled include:
- Innovative design characteristics that can be tuned to specific use cases like tokenization, DeFi, or payments
- Flexibility to make permissioned or nearly permissionless, centralized or largely decentralized ledgers whose assets can be traded on the Mainnet DEX
- Choice in validators and flexibility of system rules (e.g. optional transaction fees and reserve requirements)
- Opportunity to temporarily manage a sidechain and shut it down after it has served its purpose
Note that successful new sidechain features may even eventually be ported to the XRPL Mainnet.
Federated Sidechains give developers an opportunity to launch new features and innovative applications built on foundational XRP Ledger technology, like a smart sidechain with Hooks enabled. Developers can also create private or public sidechains, with public sidechains available for the community to leverage for various use cases.
Ripple itself will be looking to leverage the flexibility and customizability that Federated Sidechains afford in its own CBDC efforts, making it possible for private CBDC ledgers to easily and seamlessly interconnect.
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