Can Ripple’s latest development appeal to a dampened XRP investor sentiment
Venturing into the Layer 2 scaling solutions ecosystem, XRP Ledger (XRPL), a decentralized public blockchain, on 17 October announced that it had begun testing its first EVM-compatible sidechain.
This announcement came a year after David Schwartz, Chief Technology Officer at Ripple, announced that an EVM sidechain was in the works. Schwartz stated that the sidechain was designed to remove the barriers to entry for developers who want to deploy decentralized applications (Dapps) with cross-chain interoperability.
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According to the blockchain’s development team RippleX, with the sidechain,
“more developers can easily access the XRPL’s feature set (such as its speed, sustainability, and low-cost transactions) and bring Solidity-based smart contracts to the XRPL.”
In addition to a side chain, RippleX confirmed the launch of a bridge between an EVM-compatible chain and the XRP Ledger Devnet. With this bridge, developers no longer have to choose between XRPL or EVM-compatible blockchains as “they can have the best of both worlds. The sidechain and the bridge make up the first phase of this project.
The second phase is set to commence in early 2023. According to the development team, it will feature a “permissionless EVM sidechain and bridge with a unique design that connects to the XRPL Devnet to expand participation and test scalability within a controlled environment.”
The last phase would be the mainnet launch of the permissionless EVM sidechain and bridge. No timeline was provided for this.
On what the primary goal of the project is, RippleX said,
“By building an EVM sidechain and bridge, we are making XRPL features accessible to more developers that would benefit from XRPL advantages like fast, low-cost transactions at scale. Developers can also leverage the sidechain and bridge to use XRP within the EVM sidechain environment.”
Listen to XRP’s tales
At press time, XRP exchanged hands at $0.4763, data from CoinMarketCap revealed. The price of the asset embarked on an uptrend between 3 and 7 October, causing the formation of a rising wedge on a daily chart. However, XRP broke out of this wedge in a downtrend on 8 October, and its price has since declined by 10%.
With the sustained decline in buying pressure in the last ten days, XRP’s Relative Strength Index (RSI) has since chased lows. Additionally, approaching the neutral region, the RSI was in a downtrend at 58 at press time. Also indicating weakened buying pressure, the Money Flow Index (MFI) rested at 52 at the time of press.
Should these key indicators fall below their respective neutral spots, that would indicate a significant decline in liquidity in the XRP market, and sellers would scamper to hedge against further losses.