• XRPL Labs lead developer discloses auditing in process for new smart contract-enabled sidechain called Hooks.
• Will Hook drive up XRPL’s adoption and XRP’s utility in the long term?

A recent update from an XRPL Labs lead developer, Wietse Wind, discloses the development of a Hooks sidechain with XRP as the native token.

Wietse Wind, in response to a user request, made it known that XRPL Labs have signed a security contract last week. According to Wind, developers will push out the sidechain after the audit, adding any modifications made in response to the audit.

We're actually going to do this. Security audit contract signed last week.

After the audit (and potential improvements based on the results) there will be a side chain.

With XRP as the native asset. https://t.co/l6pPGyIz8l

— WietseWind – 🛠 XUMM @ XRPL Labs (@WietseWind) January 30, 2023

Wind further expressed confidence in Hooks. Claiming that the sidechain will be ready for practical use cases before it goes live on the mainnet. Accordingly, he expressed hopes that the sidechain will pass its stress test, bolstering confidence for mainnet implementation.

For better understanding, Hooks is a proposal to add smart contract functionality to the XRP Ledger. The XRP ledger is known and appreciated for its transaction throughput, speed, and low fees — but lacks flexibility.

This realization was expressed in a team statement that: “We realized that, while the XRP ledger already has a lot to offer, developers and businesses need a lot of flexibility. Allowing them to not only build what is possible today, but to build what they can imagine tomorrow.” Hence, Hooks.

Hooks or Transaction Hooks are small, efficient pieces of code. They are defined on an XRPL account, allowing logic to be executed before and/or after XRPL transactions. These hooks can be really simple, like: “reject payments < 10 XRP”, or “for all outgoing payments, send 10% to my savings account” or more advanced.

Wind states that Hooks has been in development for more than two years. However, validators cannot vote on it at this time — indicating that mainnet deployment is still a ways off.

According to information published in July of last year, developers introduced Hooks Builder, a web browser-based development environment that enables users to create XRPL smart contracts and deploy them on the Hooks testnet.

Developers are also developing a sidechain for the XRP Ledger that is compatible with the Ethereum Virtual Machine (EVM) concurrently. Significantly, testing is already in progress. It will provide XRP Ledger access to Ethereum smart contracts.

Will Hook drive the XRP price up?

Hook introduces a high-level simplicity to the XRP Ledger. Businesses and developers have a wide range of flexibility with the integration of smart contract functionalities.

With Hook, businesses and developers can allow auto-saving on incoming transactions, use “Lite Accounts” without account reserves, track loyalty points for customers, automatically park VAT, etc.

The added functionality will drive more integrations by an existing business on XRPL and adoption by intending developers. It will also increase the utility of XRP.

Since the market value for cryptocurrency projects is driven by utility, the potential increased utility Hooks adds to XRP could drive its price up.