The Cryptonomist interviewed David Schwartz, CTO at Ripple, on the occasion of the APEX conference held in Amsterdam in June a few weeks ago.
Summary
During your talk yesterday, you mentioned that improved user experience via interoperability is essential for mass adoption. So can you talk about some of the ways that Ripple is playing a key role in this?
One thing is the EVM sidechain interoperating with the XRP ledger, the main chain. So the XRP ledger is obviously the chain that Ripple’s been building on, developing, and we’ve been talking about the EVM sidechain, it’s the second chain. The logic there is that the XRPL chain is really good for sort of mainstream applications like if you want an automated market maker, there’s an automated market maker on the XRP ledger main chain. Do you want NFTs? There’s NFTs on the main chain.
The problem is they’re sort of fixed functions. They included the functionality that the community thought was the most important and the most valuable, but you have to draw a line somewhere. You can’t include every feature that a person might want. But if you absolutely needed it, it just doesn’t exist in the XRP Ledger ecosystem. So it’s a trade-off.
We want people to be able to both have the great functionality aimed at those mainstream use cases for the XRP ledger has, but also if you have an niche use case that maybe only you and 15 other people care about we don’t want to tell you that we have no answer for you right, so you could live on the EVM side chain. And so we are working on bridges like the Axelar bridge that will be for the native cryptocurrency. So the native currency on the EVM sidechain will be XRP bridged by the Axelar bridge.
How is Ripple integrating CBDCs?
I think that we’ve seen that the market has shifted from focus on CBDCs, which were always going to be very slow moving, always going to rely very much on government actors, which are very, very slow to move. I joke that they’re more conservative than the Catholic Church, but it’s true, right? Like the Federal Reserve, the Central Bank, these are very slow-moving institutions, and they did show some inclination to move rapidly and some interest. So I think our perspective would be that it looks like institutional stablecoins that are licensed, that are regulated. You know, the EU has MiCA.
There was a presentation during APEX by Messari. They were showing a chart for how these stablecoins have enabled these entire DeFi ecosystems. CBDC is maybe in the longer term, but right now, if you want to build these DeFi ecosystems, it looks like you need stablecoins.
In terms of security and decentralization, what measures has Ripple put in place to protect its network and users, and how does Ripple balance these aspects with efficiency?
We’ve put a lot of effort ourselves into what we call brand protection. For example there have been a lot of scams with people impersonating Brad Garlinghouse and impersonating me. We work really hard both to shut those scams down like on social media platforms where they occur. Also, we work to trace the funds when these scams do occur. They’re generally trying to steal cryptocurrencies. We help with work to try to track those cryptocurrencies down, freeze them at the sources where they are. That’s been a huge problem with this industry.
There’s also the security of the blockchains themselves, especially with interoperability. Blockchains don’t have, at their core design level, blockchains don’t really have a security problem because, like, you can’t steal Bitcoin from Bitcoin. There’s no place else you can take it.
And the team also works with auditors, like Bishop Fox, and others. It’s always tricky when the same people who wrote the code are trying to find the flaws in it, because sometimes you have assumptions. So when you build something, you know there are some blind spots in the design that turn into blind spots in the review, and unfortunately you can even sort of infect, one person can sort of infect the team, so the team can have blind spots. We definitely do third-party, particularly for things like security sensitive code.
