Non-Fungible Tokens, commonly known as NFTs, have been a hot topic of discussion for almost two years. The introduction of NFTs in the decentralized digital economy has brought several positive transformations. Hence everyone is now looking for innovative ways to capitalize on this opportunity and change the Blockchain economy for good.
That said, Ripple has recently announced its next step toward the evolution of its ecosystem by adding NFTs to the XRP ledger. This will offer many benefits in reducing gas fees and minting costs for NFTs.
Despite the growing prevalence of NFTs, investors need more clarity regarding this new digital endeavor. So continue reading as we simplify the concept and help you better understand all happening in this sector.
Role Of NFTs In The Current Industry
NFTs or non-fungible tokens are distinct cryptographic assets operating on a Blockchain network. These tokens come with different identification codes that set them apart from others. But NFTs differ from cryptocurrencies because one cannot exchange or trade them equitably.
Besides that, cryptos are identical to each other, like conventional fiat currencies meaning they can serve as a medium for commercial transactions. But that is not the case with NFTs since they are all unique and cannot be used as a transaction medium. Instead, NFTs represent real-world items such as real estate or artworks.
People use NFTs to tokenize real-world tangible items making it easier and more efficient to sell, buy and trade these assets. It also mitigates the risk of fraud and counterfeits, a pressing concern for stakeholders in this sector. Many even use NFTs to represent the property rights and identities of individuals.
Ripple’s (XRP) Role Over The Years
Ripple is a Blockchain network people use to transfer their funds from one person to another. The network came as a boon to the financial services industry, which often had many challenges in facilitating successful fund transfers.
The Ripple network also has its native currency, XRP, one of the industry’s most performant cryptos. Currently, almost every significant crypto exchange support XRP has given it has an extensive market capitalization making it a respected name in the top ten cryptos.
Overview Of Ripple Adding NFTs To XRP Ledger
The idea of Ripple adding NFTs to its XRP is familiar. The idea has been around for quite some time, and the project has been under development for a year. However, the project is finally over, and Ripple has now brought NFTs to its XRP ledger.
This information was confirmed after David Schwartz, the Chief Technology Officer of Ripple, informed the community on the 1st of November. He confirmed that XLS-20, the standard for XRPL NFTs, is now finally enabled on the XRP ledger mainnet. The commitment of the XRPL community and the RippleX engineers finally made this possible.
Upsides Of Having NFTs On The XRP Ledger
It does not surprise that the digital investor community is highly excited about Ripple adding NFTs to its XRP ledger. The primary reason fueling this excitement is that several perks come with this development. Some of these advantages include the following:
- Better Security: The digital trading industry has long suffered from the adversities of cybercrimes, and NFTs are no exception here. But adding NFTs to the XRP ledger brings the no smart contract mechanism that reduces the vulnerability of the ecosystem. As a result, the congestion stays at a minimum while bringing the cost down compared to most other chains in the market.
- Cost-Effectiveness: The other advantage of this entire development is better cost-effectiveness. The entire project was primarily aimed at bringing down minting and gas fees that have been troubling investors for ages. As a result, investors can now benefit from a more cost-effective and better experience when dealing with or managing their NFTs or XRP ledger.
- Energy Savings: It is no news that the crypto industry is highly energy intensive as one needs a lot of power to run powerful computers needed for minting. This has been a significant concern for all stakeholders, with global warming wreaking havoc around the globe. This is also the reason why Ethereum recently made a shift to the proof-of-stake system. Now, even XRPL is relying on the consensus model to validate transactions, further helping bring energy costs and enhancing overall efficiency.
- Standardized Royalty Enforcement: This is another great benefit that has won over creators and artists from all across the globe. This means the royalty of artists and creators will now be automatically transferred to them. In addition, the revenue earned from trading their NFTs will also be transferred to the artists and creators. Finally, XRPL now allows creators and artists to designate a third party who can mint and sell their tokens on their behalf.
Are There Any Matters Of Concerns With This Development?
Ripple has claimed this integration will establish an ecosystem that offers more transparency and sets it on a path to a more sustainable future. But in the spirit of democratic values, Ripple decided to conduct a vote and understand how members feel about this development. As a result, many members took this opportunity to point out different concerns.
One of the members asked about the risk of increased load on the network, which can further contribute to outages of individual XRP servers along with an increase in transaction costs. Besides that, there were also concerns about minting NFTs and converting extensive NFT collections simultaneously.
The Future With NFTs x XRP Ledger
There have been some subtle yet noteworthy hints from the CTO David Schwartz about more developments in the XRPL. For example, they might get access to more libraries and improvements for tokenizing assets on the XRP ledger.
However, the Ripple engineers will now focus on testing the feature while Ripple seeks collaboration from more similar entities. As for the community members, they should focus on learning more about the feature and building more applications for the ledger.