The Ripple Drop Ep. 28: Interoperability in Blockchain

We’ve seen the power and opportunity that lies within blockchain technology through use cases that support cross-border payments, reduce voter fraud, increase the efficiency of supply chain management, and lower healthcare costs. The advancements made possible by blockchain are vast, and leveraging the benefits of multiple blockchain platforms via interoperability can create an even greater impact.

On this episode of The Ripple Drop, we sit down with Mayukha Vadari, Software Engineer at RippleX, to discuss the role of interoperability in blockchain technology, how interoperability is approached and how the XRP Ledger (XRPL) can support the multi-chain future through innovations like sidechains.

The State of Interoperability Today

Blockchain interoperability refers to a range of techniques that help blockchains communicate through a seamless transfer of data, enabling improved collaboration and efficient transfer of digital assets.

“The objective of interoperability is, how do we have it all? How can we use our value in all these different ways without needing to have these siloed ecosystems?” says Mayukha.

Many blockchain projects are currently working on interoperability, and Mayukha explains there are several approaches to facilitating interactions between blockchains. One approach is ‘layer 0’ projects, which are essentially an underlying blockchain designed to act as a connector for other layers.

Cross-chain bridges—protocols that enable communication from one blockchain to another—are used as another approach to interoperability. Bridges such as Allbridge, Multichain and Apex have integrated with blockchains such as the XRPL, Ethereum, Avalanche and others to facilitate the transfer of value cross-chain. 

Yet another approach is through sidechains—a parallel network that derives its value by interpreting data from and exchanging assets between the main chain and the sidechain. Ripple proposed a sidechain strategy to the XRPL community in 2021 which would enable developers to more easily implement new features, such as native smart contracts that interoperate seamlessly with XRP and the XRP Ledger.

Benefits of Interoperability in Blockchain

When interoperability is successful, disconnected markets and business applications can more easily transfer data and value, fostering innovation and productivity. Mayukha explains that when leveraging interoperability, “you’re getting the best aspects of all projects”. 

What’s more, interoperability helps to further deliver on the promise of decentralization upheld by various blockchains. Rather than having one blockchain process all transactions, many application-specific blockchains can process transactions while communicating with one another simultaneously.

XRPL Interoperability Through Sidechains

RippleX is hard at work on a production release of sidechains that would run parallel to the XRPL mainnet if adopted by the XRP community. This functionality would allow developers to implement new features on versions of the XRPL designed to suit specific technical needs—such as for smart contracts—while maintaining the lean and efficient feature set and fraction-of-a-penny fees that make the XRPL so appealing.

Mayukha is excited for the hands-on experience building the sidechain feature and the opportunities that this can bring to the XRPL developer community. 

“[Developers] can write their own sidechains that have whatever special features they need or want and basically have their own blockchain to play around with. They don’t need to worry about needing to somehow make a bridge because that’s already built into what we’re doing.”

RippleX is also working on Ethereum Virtual Machine (EVM) compatible sidechains—a feature that will allow users to utilize Solidity smart contracts with the XRPL and lower the barriers to entry for developers wanting to build powerful DeFi apps with cross-chain interoperability

The possibilities are extensive: a sidechain can be strictly permissioned or (nearly) permissionless, public or private. A sidechain could even operate without transaction fees or reserve requirements, or could add new transaction types and functionality for storing large chunks of data on-ledger.

Want to hear more? Watch the latest episode of The Ripple Drop for more details.