XRP Ledger to Gain Ethereum Smart Contract Compatibility via New Sidechain in 2025

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The XRP Ledger (XRPL) is set to undergo a transformative upgrade in 2025 with the official launch of an Ethereum Virtual Machine (EVM)-compatible sidechain. This long-anticipated development will bring full smart contract functionality to the XRPL ecosystem, significantly expanding its utility beyond cross-border payments and into decentralized finance (DeFi), tokenization, and broader Web3 applications.

After years of research, testing, and collaboration, Ripple and Peersyst Technology have confirmed that the EVM sidechain will go live in the second quarter of 2025. This milestone marks a strategic shift aimed at attracting developers from the vast Ethereum ecosystem by enabling them to use familiar tools such as Solidity, MetaMask, and Truffle to build on XRPL.

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Bridging Two Ecosystems: How the XRPL EVM Sidechain Works

At the core of this integration is seamless interoperability between the XRP Ledger and Ethereum-compatible networks. The sidechain operates independently from the main XRPL network but maintains a secure, bidirectional connection through the Axelar network, which serves as the exclusive cross-chain bridge.

This bridge allows assets—particularly XRP—to be transferred from the XRPL mainnet and converted into wrapped XRP (wXRP) for use on the EVM sidechain. wXRP will serve as the native gas token, powering transactions and smart contract executions. This design introduces a new utility layer for XRP, directly linking its demand to on-chain activity within the EVM environment.

By leveraging Axelar’s interoperability protocol, the sidechain also gains access to over 69 connected blockchain ecosystems. This connectivity amplifies XRPL’s reach, positioning it as a hub for multi-chain applications and asset transfers.

Performance and Security Architecture

Built for speed and efficiency, the EVM sidechain uses a Proof-of-Authority (PoA) consensus mechanism. Unlike energy-intensive proof-of-work systems, PoA relies on a set of trusted validators to secure the network, enabling faster finality and lower operational costs.

Key performance targets include:

These metrics make the sidechain highly competitive with other scalable EVM chains while maintaining compatibility with Ethereum’s developer tooling.

Security remains a top priority. In February 2025, Informal Systems conducted an independent audit of the sidechain’s codebase. The audit identified one critical vulnerability related to a Cosmos SDK module, which was promptly resolved. All other findings were classified as low risk, affirming the robustness of the system before mainnet deployment.

Attracting Developers and Expanding the XRPL Ecosystem

One of the most promising outcomes of this upgrade is its potential to onboard new developers—especially those already experienced in building on Ethereum.

With full EVM compatibility, developers can now port existing DeFi protocols, NFT marketplaces, and dApps to the XRPL environment with minimal modifications. This dramatically lowers the entry barrier and accelerates innovation.

According to Peersyst Technology, early engagement on the testnet has been strong. Over 87 new projects with no prior affiliation to the XRP ecosystem are actively developing on the testnet. Notable teams include:

This influx signals growing confidence in XRPL’s evolution from a payments-focused ledger to a full-fledged smart contract platform.

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Preserving Core Strengths While Enabling Innovation

A key design principle behind the sidechain is non-disruption. The XRPL mainnet will remain unchanged—optimized for fast, low-cost payments with its native consensus algorithm. Meanwhile, the EVM sidechain handles programmability and complex logic.

This separation ensures that:

It’s a balanced approach that respects XRPL’s original purpose while embracing future-facing capabilities.

Moreover, integrating smart contracts opens doors for:

These use cases align closely with Ripple’s ongoing initiatives in enterprise finance and global settlement solutions.

FAQs: Understanding the XRPL EVM Sidechain

Q: What is an EVM-compatible sidechain?
A: It’s a separate blockchain that runs parallel to the main network but supports Ethereum’s programming environment. Developers can deploy Solidity-based smart contracts just like on Ethereum or Polygon.

Q: When will the sidechain launch?
A: The mainnet launch is scheduled for Q2 2025, following successful testnet activity and security audits.

Q: Do I need new wallets or tokens to use it?
A: Users can continue using existing XRP wallets. To interact with the sidechain, XRP will be bridged and wrapped into wXRP for gas fees.

Q: Is the XRP Ledger becoming like Ethereum?
A: No. The mainnet remains focused on payments. The sidechain adds optional smart contract capabilities without altering XRPL’s core architecture.

Q: How does this affect XRP’s value?
A: Increased demand for wXRP as gas could create upward pressure on XRP through buy-and-burn dynamics or staking incentives in future upgrades.

Q: Can existing Ethereum dApps migrate easily?
A: Yes. Most Ethereum-based applications can be deployed with minimal changes thanks to full EVM equivalence.

A New Chapter for XRPL: From Payments to Programmability

The introduction of the EVM sidechain represents more than just a technical upgrade—it’s a strategic expansion of XRPL’s vision. By combining high-speed settlement with smart contract flexibility, Ripple and Peersyst are positioning XRP as a multi-use asset in both traditional finance and decentralized ecosystems.

With over six million active wallets already in existence, XRPL has a solid user base ready to adopt new applications. The addition of DeFi, NFTs, and cross-chain interoperability could drive significant growth in usage, developer activity, and token utility throughout 2025 and beyond.

As blockchain networks increasingly compete on developer experience and ecosystem richness, XRPL’s hybrid model—secure payments on the mainnet, innovation on the sidechain—offers a compelling alternative to monolithic platforms.

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Core Keywords:

The 2025 rollout isn’t just about technology—it’s about unlocking potential. For developers, investors, and institutions alike, the future of XRPL is becoming more programmable, accessible, and interconnected than ever before.