The head of compliance at XRPL, Thomas Silkjaer, recently explained the essence of XRPL. This recent development emerged as an XRP holder feared that Xahau may lead to a decrease in the adoption of XRP and XRPL.
Note that Xahau is a novel smart contract sidechain for the XRP Ledger network. One of its features is Hooks, which permits developers to develop decentralized apps (dApps) and execute smart contracts on top of the XRPL ecosystem.
XRP Investor Raises Concern of Xahau Having Adverse Effect on XRP’s Price
A crypto investor who HODLs XRP Tim Hoff tweeted on X expressing his worries about Xahau. He noted that Xahau is a yet-to-be-launched sidechain on XRP’s ledger, and based on this, he does not believe it could add value to XRP’s market value.
The potential problem is with networks like Xahau, which will have all of the features of the XRPL, plus hooks, but only allow a one-way B2M. They could potentially steal the show, unless amendments like hooks are adopted on the main net. Side-chains are not one-way.
— Tim Hoff (@xrp_hodl_r) September 10, 2023
Hoff further stated that Xahau is not a true XRPL sidechain because it doesn’t have the two-way bidirectional bridge that would enable XRPL-to-Xahau token transfers.
According to the XRP holder, Xahau was more of a new independent network than an XRPL extension. Hoff said that if the goal is to increase the adoption of XRP, it would not manifest because of Xahau. Further, he acknowledged the efforts of Xahau’s developers in developing useful XRPL solutions.
But warned that what they created could potentially compete directly with XRPL and would hurt the holders of XRP in the future.
The Goal of Creating Xahau is not to Increase the Market Value
Thomas Silkjaer, also the head of analytics at XRPLF, weighed in to clarify what XRPL is. Silkjaer stated that the goal is not to raise the cost of XRP. Rather, it is to give companies a platform to create useful decentralized applications for XRP holders.
He rhetorically asked, “Why should firms build on the technology that helps XRP holders?” Then he went further to say that businesses are driven by profit, and if a business wants to build on the technology, they will build on it if it suits their needs, whether or not the final product uses the asset.
According to the analyst, enterprises building on it are not obliged to increase the interest of XRP holders. Instead, they’re expected to develop profitable solutions that meet real-world necessities, using XRP as a bridge asset or other smart contract, stablecoin, token, etc.
Silkjaer further stated the possibility of using a “wrapped XRP token” on Xahau. Meanwhile, Hoff disagrees with the WXRP’s usefulness during the Twitter conversation.
But Silkjaer stood his ground and pointed out that the wrapped XPR token represents XRP on the Xahau system. Moreover, he used XChainBridge, a multi-token extension, as an instance, stating that the extension also transfers the wrapped XRP asset.
Additionally, Silkjaer noted that XRP is wrapped on the Peersyst/Ripple EVM sidechain and that some sidechains could decide to utilize wrapped XRP as a gas token.
According to him, Xahau and XRP are not similar assets, but one can bridge XRP to Xahau whenever necessary, possibly from the first day through a monitored gateway.
Nevertheless, he stated that aside from using the wrapped asset as gas within sidechains, there is no difference between XRP and the wrapped XRP, as both can go into smart contracts and serve other features within a chain.