The XRP Ledger (XRPL) is preparing to introduce native smart contract functionality three years after a group of developers created Xahau, a separate blockchain built specifically to deliver the programmability that XRPL had declined to adopt.
Today, the situation has changed. XRPL is actively developing its own smart contract framework, with proposed specifications that even reference technologies pioneered by Xahau. The development marks a significant shift for the XRP ecosystem and raises important questions about the future role of Xahau as both networks continue to evolve.
Why Xahau was created
In 2023, developers behind the Hooks project decided to fork the XRP Ledger after years of unsuccessful attempts to bring smart contract functionality to the network.
Rather than waiting for validator approval, they launched Xahau, an independent Layer 1 blockchain built from XRPL’s open-source code.
The new network retained many of XRPL’s core features, including:
- Fast consensus
- Native decentralized exchange
- Low transaction fees
- Efficient payment infrastructure
However, it introduced one major addition—Hooks, a lightweight smart contract system that allows accounts to automatically execute programmable logic during transactions.
Hooks introduced programmable accounts
Unlike traditional smart contracts found on Ethereum, Hooks were designed to remain lightweight and efficient.
They enable users to automate functions such as:
- Time-locked payments
- Social recovery wallets
- Automated account rules
- Self-custodial payment management
Because Hooks execute directly at the account level, they maintain the XRP Ledger’s focus on speed and low-cost transactions rather than becoming a fully programmable virtual machine.
Xahau also introduced its own governance model, validator network, and native token, XAH, making it an independent blockchain rather than simply an extension of XRPL.
XRPL now moves toward native programmability
After years of resisting smart contracts, the XRP Ledger has begun developing its own programmable infrastructure.
Two proposals are currently attracting attention:
XLS-100d Smart Escrows
This proposal introduces WebAssembly (WASM)-based programmable escrow functionality, allowing developers to create more flexible payment conditions while maintaining XRPL’s payment-focused architecture.
XLS-101 Smart Contracts
A broader proposal, XLS-101, aims to bring general smart contract functionality to the XRP Ledger.
Notably, the draft specification acknowledges both Hooks and the Ethereum Virtual Machine (EVM) as sources of inspiration.
This recognition highlights how ideas introduced through Xahau have influenced the XRP Ledger’s ongoing development.
Three smart contract approaches now exist
Instead of relying on a single solution, the XRP ecosystem is gradually developing three separate approaches to programmability.
These include:
- Hooks on Xahau
- Ethereum-compatible smart contracts through the XRPL EVM Sidechain
- Native WebAssembly smart contracts on the XRP Ledger
Each architecture targets different developer needs and could serve different use cases as the ecosystem expands.
Governance remains a major difference
Despite growing technical similarities, XRPL and Xahau continue to differ significantly in governance.
On the XRP Ledger, protocol upgrades require support from at least 80% of validators over a sustained period before they become active.
This conservative approach helps maintain network stability but can significantly slow feature adoption.
Xahau follows a different governance structure, allowing new functionality to be introduced more quickly through its own validator network and governance mechanisms.
The contrasting models illustrate two different philosophies:
- Stability through broad consensus.
- Faster innovation through independent governance.
What this means for XAH
As XRPL prepares to introduce native smart contracts, some investors are questioning how this could affect XAH, Xahau’s native token.
One perspective suggests that if XRPL successfully launches similar functionality, Xahau’s original competitive advantage may become less significant.
Others argue that Xahau still offers unique features, including:
- Hooks-based account logic
- Independent governance
- Different token economics
- Faster protocol evolution
Much will depend on how quickly XRPL’s proposals move from development to full activation.
Developers will watch validator support
Although XRPL’s smart contract proposals are progressing, activation is not guaranteed.
Every major protocol upgrade must still receive sufficient validator approval before becoming part of the network.
History has shown that proposed amendments can remain under discussion for years before reaching the required threshold.
For developers, the most important milestone will not be announcement dates but actual validator support and successful network activation.
Outlook
The relationship between XRPL and Xahau has evolved from competition to a more complex form of technological influence.
Xahau demonstrated that lightweight smart contracts could work within the XRP ecosystem, while XRPL is now pursuing its own native implementation using WebAssembly and broader smart contract capabilities.
Whether developers ultimately prefer Xahau’s mature Hooks framework or XRPL’s future native smart contracts will depend on network adoption, validator approval, ecosystem growth, and real-world developer activity over the coming years.
