For quite some time now, Ripple, a blockchain-based payment protocol, has been seeking out means to improve the applications and adoption of XRP. Xpring, the investment arm and technology incubator of Ripple, announced its strategic investment in Flare Networks – a smart-contract-based platform.
The Ripple-Flare collaboration promises to add utility, value and new applications for XRP and its connected components.Let’s delve deeper into how the integration of smart contracts will activate Ripple’s market sprint.
The flare network connection
What is the Flare Network?
Flare is an avant-garde blockchain network that feeds off a similar consensus as Stellar and Ripple – the Federated Byzantine Agreement (FBA) protocol. This consensus protocol adopted by the Flare Network has flexible trust and completely ordered, making the possibility of an attack on the order of transactions almost inexistent.
Some of the features of the Flare Network include:
It is completely permissionless, open and Turing-complete.
The overall safety of the network is not dependent on economic incentives.
Owning a token on the network does not grant power
An algorithmic stablecoin that’s generated by burning Ripple (XRP) in parts
Flare adopts XRP’s address schemes and encryption protocols so that both networks can utilize a single key while providing XRP users with a seamless experience
Flare is a useful tool for entrepreneurs and businesses because of the price stability of its token and low volatility. Regardless of the size of your business, even when it grows large, the safety of the Flare Network remains uncompromised. Importantly, this network provides easy and alternative ways for XRP users to explore interesting and complex things.
How Flare Will Work with Ripple
Late 2019, Flare Network reported its investment and partnership deal with Xpring. A moved poised at bringing partners and an avalanche of resources to expand and enhance the XRP, Xpring and Flare ecosystems. The process entails the integration of the ETH Virtual Machine to allow private and public networks to take maximum advantage of Turing-complete smart contract.
According to the Xpring team, Flare will leverage on Ripple’s encryption system and address to offer Ripple users seamless interfacing with smart contracts. This mechanism is targeted at ensuring that ripple users can explore a variety of use cases for the XPR ledger, such as the development of apps and settlement of contracts
At the launch of the network, a protocol built on Flare, FXRP, will safely activate the trustless distribution, redemption and usage of Ripple (XRP) on Flare. XRP will be trustlessly and safely converted to FXRP and secured by Spark, Flare’s token. Flare will facilitate the interoperability of XRP and other networks through protocols such as Polkadot and Cosmos or with ETH via a structured bridge protocol.
What does this even mean? Basically, Flare can be utilized as a trustless and defined bridge between XRP and other networks, and more significantly, it can serve as XRP’s smart contract platform.
Furthermore, the Flare Protocol (FXRP) methodology could also be adopted by other non-flare tokens, as the means to determine suitable tokens is embedded into the system and its governance network.
Mechanism of the Flare Network and Ripple
FXRP grants holders of XRP (originators) the ability to transfer their asset to certain XRP Ledger (XPRL) addresses dubbed “agents.” In turn, originators get FXRP on a 1:1 conversion basis with XRP, of course, secured with Flare’s Spark. It is also possible for an FXRP holder (redeemers in this case) to redeem the equivalent worth of FXRP back in XRP.
All they need do is, transfer the FXRP back to Flare, and the agents will send the equivalent amount of XRP to the XPRL address of the redeemer; all facilitated by smart contracts. If for one reason or the other, the agent is unable to quickly see the redemption process through, the redeemer receives the equivalent value of FXRP in XRP and also compensation to cover transaction cost on the next XRP trade. Let’s take a typical illustration of the Flare-Ripple workflow.
“Say, Jake, for instance, wants to convert his XRP to FXRP on Flare; Jake is the originator. As already established, he’ll incur a transaction fee that’s a certain percentage of XRP. Jake specifies the volume to be converted and the FXRP system suggests the available agent (say Peter) on Flare and records the originator’s address on the XPRL.
If there exists an adequate volume of FXRP in the system, an escrow-like protocol locks the required volume of FXRP for some time, pending the authentication of Jake’s transaction. This means that James doesn’t have to contact Peter or even trust him.
Consequently, Peter’s address is generated by a set of algorithmic instructions and forwarded to Jake to fulfil his part of the transaction by transferring XRP to the XRPL, inclusive of transaction fees. The Flare system then mints FXRP and sends to Jake through his nominated address. If by any chance, the system does not have the desired volume FXRP, Jake is refunded his escrowed asset.”
The innovation in the mix
Ripple is in a league of its own for many reasons. It’s very unlike several other blockchain projects that just want to live up to BTC’s standards, without any particular use case or aim. Since its blowout in 2012, has always had the goal of using blockchain, XRP and the internet for cheap, cheap and reliable cross-border transfer of value.
In other words, Ripple hopes for banks and financial institutions to adopt its tech, but it’s been quite the opposite. Mainstream adoption has been a long-standing issue and Ripple resolved to delve into other use cases that will ignite the interest of the world. This concern is a contributing factor to the innovative collaboration with the Flare Network.
The ideology of the Flare-XRP collaboration was birthed to increase the use cases of the XPR token, promote platform interoperability and the utilization of XPRL. while also receiving massive representation in decentralized finance. It was only reasonable to have looked on to Flare Network, a new smart contracts platform for integration, although some enthusiasts disagree with Ripple’s move.
When you take a look at platforms that utilize the Proof-of-Work and Proof-of-Stake protocols, the security of such networks is mostly dictated by incentive given to nodes. In this case, Flare boasts an innovative security architecture that doesn’t survive on economic incentives. Also, the Flare-XRP collaboration has largely improved Ripple’s market performance and created avenues for more use cases.