Xahau will possibly bolster XRP Ledger adoption and boost XRP’s position in the crypto market according to one expert.
According to a recent whitepaper, Xahau will incorporate Hooks, enabling smart contracts capabilities.
Crypto enthusiast Yassin Mobarak has shared his views of the Xahau Ledger and its native token XRP+ and how it could possibly impact the XRP Ledger (XRPL) and the original native token XRP. With XRP struggling to break above $0.55, investors hope any development around this could lead prices to break above $0.70.
XRPL Labs, the developers of Xumm, recently released the Xahau Whitepaper. In this paper, the project proposed incorporating Hooks, functioning as an XRPL sidechain with smart contracts capabilities. Furthermore, this will prompt the launch of XRP+, for on-chain functionalities. Uniquely, users will be able to obtain XRP+ by burning XRP. Given the nature of the proposal, it is clear that the launch will impact XRPL and its native token XRP.
According to market expert Mobarak, there will be some positives and negatives from Xahau. One of the positives is the aforementioned burn-to-mint mechanism. Users burning XRP to acquire XRP+ will reduce the circulating supply of XRP reducing the overall supply. With lowered supply, demand will be higher which should lead to price increases.
However, this is a double-edged sword since it forces the community to pick a chain for each XRP they own. The analyst explained, “The two chains are heading in two different directions. All future value accrual in Hooks will only benefit the new chain.”
Its launch is further a testament that the XRP Ledger is decentralized. Naysayers of the XRP project have often accused the project of being centralized and in the control of Ripple Labs and its executives.
Furthermore, unlike the popular narrative that XRP+ will compete with XRP as a bridge currency, the new token will not be able to reach the lengths achieved by XRP. The analyst noted;
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This fork will not compete with XRP’s main value proposition, namely a bridge currency for fast efficient cheap cross border payments and settlement. Frankly, this Hooks fork will not be able to establish the kind of international payment corridors that Ripple worked hard to establish among financial institutions over the past 10 years.
In its success, the Xahau/Hooks chain is likely to attract a large number of independent developers and founders. This is because the chain will offer more use cases than the current XRP Ledger offers. In this eventuality, it is likely the ecosystem risks making the current XRP Ledger more reliant on Ripple for its success.
Liquidity is another key concern from the expert, noting;
Overall XRP liquidity over time will suffer as the Hooks chain becomes successful and vibrant. This is especially true for liquidity coming from retail sector. More retail investor liquidity will flow to the XRP+ token instead of the original XRP.
For the most part, Xahau will boost the XRP ecosystem and drive greater adoption. This will help drive XRP prices which is targeting the $0.70 range achieved a couple of weeks ago. In the long term, investors aspire to break above the $1 target before aiming for the all-time high of $3.
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