Does the XRP Ledger support smart contracts (Hooks, the EVM sidechain), and does that matter for XRP?

The full answer

The XRP Ledger’s mainnet functions are built into the server software and switched on by validator vote. It does not run general smart contracts. Ripple describes an XRPL EVM Sidechain that works with Ethereum tooling. Xahau’s whitepaper calls Xahau the smart contract sidechain for the XRPL ecosystem and names Hooks as its big new feature.

What can the XRP Ledger do without smart contracts?

The xrpl.org use-case menu was captured in late September 2026. It lists these functions [1]:

• direct XRP payments and cross-currency payments
• escrow and checks
• stablecoins and NFTs
• a DEX, permissioned trading and an AMM
• lending, marked “Open for Voting”

The menu has no smart-contract entry [1]. Crypto.news, reporting on Messari’s research, stated that Permissioned Domains, a Permissioned DEX and Token Escrow went live on the ledger [6]. The page on compliance features for institutions covers those tools.

Crypto Daily’s July 23, 2026 explainer of the proposed lending protocol describes this design choice. If the protocol is approved, applications would not have to reinvent core lending logic in bespoke contracts. They could instead call standardized ledger objects for vault deposits, loan creation and repayment tracking [5]. Crypto Daily added that on July 1 a press release from LendProtocol teased a consumer-facing product with a 12% APR for XRP and RLUSD deposits. It described this as a claim from the project, not a guarantee of returns or risk level [5]. Crypto Daily reported that the companion demo app is live and walks through the full lifecycle: create vaults, deposit, originate uncollateralized fixed-term loans, repay, and inspect state transitions onchain. It also said Ripple had invited developers to try the protocol on devnet [5].

How do new features reach the XRP Ledger mainnet?

New ledger functions arrive as amendments. crypto.news reported on September 18, 2026, citing XRPL’s official rules, that an amendment’s rules become active only after more than 80% of trusted validators support it continuously for two weeks [3]. Installing server software only gives a server the code needed to understand the proposed rules. Validators choose separately whether to vote for activation [3]. The page on how XRPL amendments are approved sets out the full process.

Lending shows how long this path can take. Server version 3.1.0 was published on January 28, 2026 and introduced Single Asset Vaults and the Lending Protocol [4]. crypto.news counted validator support on September 17, 2026. It found 16 of 35 trusted validators supporting SingleAssetVault and 13 of 35 supporting LendingProtocol, so neither was enabled on mainnet [3]. The current status is tracked on whether XRPL lending is live. Crypto-economy.com reported that Ripple, Clearpool and Cicada Partners are working on an institutional market based on the XLS-65 and XLS-66 architecture. It said Clearpool has accumulated over $930 million in institutional loans and Cicada has underwritten more than $860 million in credit, a combined track record of approximately $1.8 billion, and that the model contemplates using RLUSD. Crypto-economy.com reported that Validator Vet confirmed Lending Protocol v1.1 would arrive with version 3.4.0, including fixes to the first version. It said XRPL’s amendment tracker listed LendingProtocolV1_1 as in development. Crypto.news reported that the XRPLF feature code lists both LendingProtocolV1_1 and fixCleanup3_4_0 as supported while retaining DefaultNo voting behavior.

Other amendments move faster. Analytics Insight reported that PermissionDelegationV1_1 entered its 14-day activation countdown on September 21, 2026, with 29 of 35 trusted validators in support. It could activate on October 5 if support stays at or above 80% [7].

Built-in features still carry code risk. A later release that superseded version 3.1.0 disabled the Batch and fixBatchInnerSigs amendments because of a severe bug [1]. Crypto Daily’s lending explainer makes the same point: even native features can have logic or accounting flaws [5].

What is the XRPL EVM Sidechain, and what does Ripple say it does?

Ripple wrote on July 23, 2026 that the XRPL EVM Sidechain combines compatibility with the EVM ecosystem and existing Ethereum tooling. Ripple said it does this while remaining closely connected to the XRPL and the wider XRP ecosystem [2]. In the same post, Ripple said RLUSD’s multichain expansion is being anchored by the sidechain, alongside launches on Base, Optimism, Ink and Unichain [2]. Ripple’s own claim is that this lets RLUSD share in the composability that drove stablecoin adoption across DeFi, while still accruing value and activity back to XRPL infrastructure [2].

The sidechain idea is older than this post. On September 30, 2021, the xrpl.org blog announced that RippleX had released an engineering preview of a proposed Federated Sidechains system. The blog said the system would unlock capabilities related to smart contracts and DeFi [1].

How XRP itself moves onto other networks is covered in whether XRP can be used on other blockchains.

What about Hooks and Xahau?

Xahau’s whitepaper (July 1, 2025) says the Xahau Ledger is the smart contract sidechain for the XRPL ecosystem [14]. It calls Hooks the big new feature of Xahau and the smart contract implementation for rippled: small pieces of code installed on an account that impose rules on the transactions the account sends or receives before those transactions can be finalized [14]. The XRPL Hooks site says Hooks is a project developed by XRPL Labs [11]. Ripple wrote on September 2, 2024 that existing smart contract standards, such as Hooks from XRPL Labs, lay an important foundation that can be iterated upon to enhance Mainnet capabilities [15]. This page makes no claim about whether Hooks run on XRP Ledger mainnet or whether they use XRP.

Does any of this create demand for XRP?

Messari’s first-quarter 2026 report, as reported by crypto.news, said XRP remains tied to network use through five channels: transaction fees, account reserves, liquidity, asset ownership and bridging across currencies [6]. Ripple said on July 23, 2026 that as RLUSD spreads across chains, XRP will increasingly serve as a complementary asset for liquidity, settlement, swaps, collateral and payments [2]. That is the company’s stated expectation. It is not a measurement.

The measured amounts are small. Blockworks put the average XRPL transaction cost at $0.00024 during the quarter, in an article hosted on Yahoo Finance. It found that about 40,600 XRP were burned in the quarter it reported on [8]. DefiLlama’s XRPL page, captured in September 2026, showed $45.03 million in DeFi total value locked and listed the XRPL DEX at $40.18 million [9].

What is the strongest case that this does not matter for XRP?

CCN analysed the Blockworks data on August 20, 2026. It argued that billions of dollars can move across XRPL without creating substantial fee demand or meaningfully reducing XRP’s supply [8]. That argument applies to the ledger’s built-in features. For the EVM sidechain, no data shows activity returning value to XRP, only Ripple’s statement that it will [2].

A wider critique is that general-purpose smart-contract chains could take the bridge role instead. That case is set out on whether Ethereum or Solana could become the universal bridge.