Schwartz’s Vision: Codius Bringing Bitcoin and Ethereum to XRP Ledger

TLDR

• David Schwartz explained how Codius could bring Bitcoin and Ethereum to the XRP Ledger while addressing counterparty risks.
• Schwartz emphasized the XRP Ledger’s built-in decentralized exchange for trading various assets directly on the network.
• The former Ripple CTO identified counterparty risk as a major issue when holding assets like Bitcoin on the XRP Ledger.
• Codius was proposed as a decentralized smart contract platform that could replace human-managed gateways with trustless code.
• Schwartz highlighted XRP’s autobridging feature as a way to enhance liquidity when trading different assets on the XRP Ledger.

In 2018, former Ripple CTO David Schwartz discussed how Codius could bring assets like Bitcoin and Ethereum to the XRP Ledger. He emphasized that the XRPL already featured a decentralized exchange (DEX) but pointed out issues with counterparty risks. Schwartz suggested that Codius, a decentralized smart contract platform, could address these risks and improve the XRP ecosystem.

Schwartz Highlights XRP Ledger’s Built-In DEX for Asset Trading

David Schwartz explained that the XRP Ledger had integrated a decentralized exchange (DEX) from the start. This built-in feature allowed users to hold, send, and trade various types of assets directly on the ledger. Unlike other blockchain networks that rely on separate decentralized applications (dApps), the XRPL embeds the DEX at its core.

Schwartz pointed out that users could trade more than just XRP on the XRPL. They could also trade other issued assets, including gold, fiat currencies, and tokens created within the ecosystem. However, he warned about a major issue when assets like Bitcoin and Ethereum were brought onto the XRPL.

The Problem of Counterparty Risk and Codius as a Solution

Schwartz raised concerns about counterparty risks when using the XRP Ledger to hold assets like Bitcoin and Ethereum. He explained that someone must hold the real Bitcoin or Ethereum on its native blockchain, with a gateway issuing a representation of the asset on the XRPL. This introduces a risk because users need to trust the gateway to safeguard the underlying assets.

To solve this, Schwartz proposed Codius, a decentralized hosting platform for smart contracts. Instead of relying on a company to manage assets, users could trust transparent code to manage the movement of assets. Codius would serve as a trustless counterparty, eliminating the need for a human-managed gateway.

How Codius Could Enable Trustless Asset Trading on XRPL

Codius could potentially allow Bitcoin, Ethereum, and other assets to be traded on the XRP Ledger without the risk of relying on centralized gateways. Schwartz emphasized that this trustless system would reduce the chance of mismanagement and improve the security of asset transactions. This would make the XRP Ledger a more secure and efficient platform for cross-asset trading.

Schwartz also highlighted the strength of XRP’s autobridging feature, which uses XRP as an intermediary to complete trades between assets that lack direct markets. This feature, combined with Codius, could help streamline trading across various assets and ensure that liquidity remains strong on the XRP Ledger.

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