XRP is Unleashing DeFI with its Cosmos EVM Sidechain

How the Biggest Ecosystems in Crypto are Scaling with Cosmos.

While the Cosmos SDK has been the foundation of hundreds of blockchains since its inception in 2018, it’s now starting to draw significant attention from other ecosystems in web3.

Some recent examples include:

• XRPL EVM chain onboarding XRP holders and unlocking a native XRP DeFi ecosystem
• Babylon onboarding BTC holders and unlocking BTC utility with restaking and DeFi
• TAC onboarding Telegram users natively to dApps

Bitcoin, The Open Network (TON), and XRPL/Ripple were extremely successful within their original environments. In order to continue expanding and realize their full potential, they need to overcome significant growth barriers such as isolated liquidity, extending functionality and use cases, and reaching more users.

This is where Cosmos’ unparalleled stack proves its value. The flexibility of Cosmos SDK, its EVM stack, and the interoperability of the IBC protocol remove these barriers, giving developers full customization to build their platforms while connecting them to more than 120 sovereign blockchains.

Cosmos EVM is an open-source solution that allows anyone to build their own chain, rollup, or EVM-compatible app using the best L1 toolkit in the industry and includes full Ethereum composability. Builders can take advantage of custom modules for their SDK and optimize for speed or decentralization depending on their needs. All this with built-in interoperability between EVM domains and Cosmos.

This upgrade unlocks an inflow of large, unique projects into the Cosmos ecosystem and is just the beginning. In fact, we’re currently witnessing a major trend that’s moving us closer to our vision of creating the internet of blockchains. And today, we’re diving into the exciting progress and upcoming launch of Ripple’s XRPL EVM.

What is XRPL EVM?

In short, the XRPL EVM is a sidechain of Ripple Labs’ XRPL (XRP Ledger) blockchain, and XRPL is the home of the XRP token — the fourth-largest crypto asset by market cap.

XRPL infrastructure is optimized for cheap and fast transactions, and while its powerful infrastructure has undoubtedly created massive success for Ripple in the payments industry, its lack of programmability is a barrier to expanding its utility.

To overcome this barrier, Ripple and its partner Peersyst Technology are bringing an entirely new dimension to the XRPL network by building the XRPL EVM — and they’re using Cosmos infrastructure (Cosmos SDK and IBC) as the foundation.

Ultimately, XRPL EVM provides a solution to XRPL’s limitations by enabling programmability. Unlike XRPL, its EVM counterpart supports smart contracts, which are the building blocks of web3 applications.

The addition of smart contracts to the XRPL ecosystem creates major implications, including unprecedented utility for the XRP token. More specifically, it enables XRP to serve as:

• Collateral in permissionless lending markets
• A medium of economic security via staking
• A token for gas fee payments
• Additional DeFi strategies

In addition to bringing new possibilities to the XRP community, XRPL EVM operates independently from the original XRPL blockchain, enabling it to continue to function at peak performance. Assets can easily be bridged back and forth between the two chains as well, using the Cosmos-based Axelar bridge to seamlessly onboard the XRP community and its 20k daily active users.

Public Testnet

While XRPL EVM has been in development since 2022, its highly anticipated public testnet went live this past March.

The excitement surrounding the launch was quickly reflected in the testnet’s massive participation. So far, there have been more than 10 million transactions in total, with peak daily activity exceeding 300,000 transactions.

In addition to significant user activity, XRPL EVM has also drawn lots of developers to its testnet, as its EVM compatibility enables smart contracts to be built using popular Ethereum-native languages like Solidity. In fact, 87 of the contributors to XRPL EVM have no prior activity in the XRPL ecosystem, suggesting that they were onboarded from another large community, such as Ethereum.

Additionally, the dual Cosmos/EVM infrastructure is currently home to a diverse selection of 75+ testnet apps from multiple ecosystems. Some notable Cosmos-based projects that are active on XRPL EVM include:

• Bridges — Squid, Skip Go, Axelar, IBC
• DeFi — Elys Network, Injective
• Oracles — Band Protocol
• Wallets — Leap, Keplr

XRP, Cosmos, and EVM. Better Together.

While the XRP community is massive on its own, we’re thrilled to see them embrace the flexibility and interoperability of the Cosmos infrastructure to explore new territory.

Be sure to follow Peersyst Technology to keep up with all the latest developments surrounding the XRPL EVM ecosystem as it prepares for its anticipated mainnet launch.

XRP is Unleashing DeFI with its Cosmos EVM Sidechain was originally published in Cosmos Ecosystem Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.