Now it isn’t possible to run smart contracts in the Ripple network. This limits its functionality. But in the next six months, the situation may change.
XRP cryptocurrency is widely used to make cross-border payments. Ripple has hundreds of partnerships with financial companies that use the XRP network. However, smart contracts cannot be launched on this network like on the Ethereum network. Because of this, in particular, ICOs cannot be launched on the XRP platform. But more importantly, DeFi projects are not working here either – those projects that combine fiat financial instruments with the benefits of blockchain. This year there has been a boom in DeFi, they even began to slow down the Ethereum blockchain, reducing its performance. Meanwhile, the growth of ETH capitalization this year should be attributed to DeFi. Since May, when the digital finance boom began, the capitalization of the second cryptocurrency has grown by more than 80%. XRP capitalization increased by only 13% over the same period.
The situation promises to drastically change the startup called Flare Networks. His co-founder Hugo Philion has promised to add smart contracts to XRP. Flare provides a platform for using XRP tokens with smart contracts. For this, the FXRP system is used. Flare has its native Spark token. The platform itself runs on the Ethereum Virtual Machine (EVM) and makes it possible for incomplete networks like XRP, as well as Bitcoin, Litecoin, and others, to run smart contracts. The startup promises to “snapshot” on December 12. On this day, holders of XRP tokens will receive Spark tokens for free to manage the Flare network, issue XRP tokens on it and launch smart contracts. However, the final decision to launch XRP on the Flare smart contract network will be made by Spark token holders. They will also vote on whether or not to offer smart contracts to other well-known incomplete networks, including the king of cryptocurrencies.
Support for the unexpected evolution of the Ripple ecosystem has already been announced by the largest financial services company eToro. eToro is in talks with both members of a possible alliance to distribute Spark, Flare’s native token. The interest of traders is easy to understand because if the alliance takes place, a bridge will be created between the XRP and ERP networks. Ripple CEO Brad Garlinghouse said Flare combines the best of XRP, namely fast settlements, with Ethereum smart contracts. And this allows expanding the possibilities of useful applications of XRP for lending and other areas of DeFi.