Ripple Labs has been working on a new version of XRPL, called “XRP Ledger 2.0,” which will include a new consensus mechanism and smart contract functionality. However, the project is still in its early stages, and it’s unclear when it will be ready for prime time.
Ripple Labs’ recent court victory has lifted a regulatory cloud that had hung over the project for years, but the persistent criticism of XRP Ledger’s centralization remains. “Ripple basically said, ‘Hey, let’s make Bitcoin adoptable by institutions,’ so they created their own version of a decentralized currency that was faster and more consistent and cheaper,” according to a former Ripple Labs employee. XRP Ledger has a market capitalization of $42 billion and has attracted big banks like Bank of America as partners. NFTs and smart contract-like functionality are currently on the way, and third-party sidechains are beginning to proliferate.
Ripple’s original use-case for XRP was quick and cheap cross-border payments, but its focus has since expanded to include additional use cases like central bank digital currencies. Crypto purists and bitcoiners take issue with Ripple’s many financial and central bank partnerships, arguing they’re anathema to what “decentralized” payment networks are all about. XRP Ledger’s consensus mechanism, called “proof of association,” is more closed-off than Bitcoin and Ethereum, and only around 35 validators play an outsize role in keeping the chain alive and truthful.
XRP Ledger has struggled to find much adoption outside of a limited set of use-cases, and its lack of programmable smart contracts has hindered its retail-focused XRPL use-cases. Ripple Labs has been working on a new version of XRPL, called “XRP Ledger 2.0,” which will include a new consensus mechanism and smart contract functionality.