Key Crypto Projects Propel Interoperability and Scalability with Sidechain and Layer 1 Developments

Executive Summary

The cryptocurrency ecosystem is experiencing a significant evolutionary phase, marked by prominent projects enhancing scalability, interoperability, and functional diversity. Movement Network is transitioning from a sidechain to a sovereign Layer 1 blockchain, targeting performance metrics of over 10,000 transactions per second (TPS) and sub-second finality. Simultaneously, the XRP Ledger has launched its Ethereum Virtual Machine (EVM) sidechain on mainnet, integrating smart contract capabilities into its ecosystem and witnessing a rapid influx of decentralized finance (DeFi) activity. Concurrently, major trading platform eToro is actively exploring the development of its own proprietary blockchain infrastructure to accommodate millions of monthly transactions and expand its tokenized asset offerings. These strategic shifts, alongside other notable developments such as Cardano's Midnight privacy sidechain and LayerZero's integration with Rootstock, underscore a collective industry push towards a more robust and interconnected Web3 landscape. The market anticipates increased liquidity and diversified application development, though the rapid pace of innovation may introduce heightened volatility.

The Event in Detail

Several key players are spearheading advancements in blockchain infrastructure.

Movement Network's Layer 1 Evolution Move Industries, a core contributor to the Movement Network, announced on September 17, 2025, its network's evolution from a sidechain architecture to a sovereign Layer 1 (L1) blockchain. This upgrade aims to deliver a significant performance boost, targeting over 10,000 TPS with sub-second transaction finality, a substantial improvement from its previous 500-600 TPS capacity. The L1 architecture will facilitate native MOVE token staking, exclusively for unlocked tokens to ensure equitable community participation, and will incorporate advanced Move 2.0 programming language features, including enum types and function values. A public testnet is slated for an imminent launch, with the mainnet migration anticipated by the end of 2025. The transition is designed to be transparent, ensuring existing funds, smart contracts, and network activity remain undisturbed. This strategic shift positions Movement for enhanced real-world asset tokenization and mobile-first experiences, while also eliminating the single-point-of-failure inherent in its previous centralized sequencer model.

XRP Ledger's EVM Sidechain Launch The XRP Ledger (XRPL) has officially launched its EVM sidechain on mainnet, marking a pivotal moment for Ethereum compatibility and smart contract programmability within the XRPL ecosystem. Developed in collaboration with Peersyst, this sidechain allows developers to build, port, and deploy cross-chain and EVM-native decentralized applications (dApps), leveraging XRPL's liquidity and operational stability. David Schwartz, Chief Technology Officer of Ripple and co-creator of the XRP Ledger, noted that the EVM sidechain provides "a flexible environment for developers to deploy EVM-based applications, while maintaining a connection to the XRPL's efficiency. It extends the capabilities of the ecosystem without changing the fundamentals that make the XRPL reliable." Ferran Prat, CEO of Peersyst, emphasized that this launch "unlocks a new era for XRP — one where it can flow seamlessly across the multichain world." The sidechain integrates with the Axelar bridge, facilitating connections to over 80 blockchains and enabling XRP as a native gas asset. Its initial week saw nearly 1,400 smart contracts deployed and a Total Value Locked (TVL) surge to $120 million, demonstrating strong demand for lower transaction fees and faster processing compared to the Ethereum mainnet.

eToro's Exploration of Proprietary Blockchain Online brokerage eToro Group Ltd. is exploring partnerships for the potential launch of its own blockchain network, as confirmed by CEO Yoni Assia. The company is in discussions with "four or five" distinct blockchain ecosystems for a sidechain solution, with a launch projected several months away. This initiative aims to support eToro's ambition to process millions of monthly transactions on crypto rails. The company recently introduced tokenized stocks on Ethereum, offering 24/7 trading for 100 prominent U.S. companies and ETFs to European users, a move that mirrors competitor Robinhood Markets Inc. Assia highlighted the necessity of a dedicated blockchain, stating, "We can't run today the millions of transactions that we're transacting on a monthly basis on existing blockchains. We'll need, by definition, to have a dedicated blockchain if we want to run the entire eToro ecosystem." The tokenization process, which converts traditional stocks into digital ERC20 assets, reduces trading costs and enables round-the-clock market operations, with future considerations for private company tokenization.

Other Significant Developments Beyond these major undertakings, Cardano's Midnight privacy sidechain has detailed its "Glacier Drop" tokenomics, outlining the community-driven distribution of 24 billion NIGHT tokens to holders across various blockchains, including Cardano, Bitcoin, and Ethereum. Eligibility criteria include a minimum holding of $100 equivalent in native assets at a historical snapshot. Additionally, LayerZero is connecting to the Bitcoin sidechain Rootstock, and Wormhole is integrating with XRPL, further enhancing cross-chain interoperability.

Market Implications

These concerted efforts to enhance blockchain scalability and interoperability carry profound market implications. The advancements from Movement Network and the XRP Ledger are expected to significantly boost liquidity and foster the development of novel DeFi applications by providing more efficient and cost-effective environments for smart contracts. The increased cross-chain functionality, facilitated by projects like Axelar, Squid, LayerZero, and Wormhole, is crucial for creating a more unified and accessible Web3 ecosystem, allowing assets and data to flow more freely between disparate chains.

The strategic move by platforms like eToro to embrace tokenized assets and consider proprietary blockchain solutions signals a growing confluence between traditional finance and the decentralized Web3 space. By reducing trading costs and enabling 24/7 market access for traditional securities, eToro's initiative, mirroring Robinhood's approach, could accelerate institutional adoption and broaden the appeal of blockchain technology to a mainstream investor base. This trend suggests a potential diversification of smart contract platforms and a more competitive landscape for underlying blockchain infrastructure. While these developments promise a more robust and interconnected future, the rapid evolution and technical complexity may contribute to continued market volatility, particularly as new solutions are tested and refined.

Expert Commentary

Industry leaders have provided insights into these transformative developments. David Schwartz, CTO of Ripple, underscored the strategic value of the XRPL EVM Sidechain, stating:

"The XRPL EVM Sidechain introduces a flexible environment for developers to deploy EVM-based applications, while maintaining a connection to the XRPL's efficiency. It extends the capabilities of the ecosystem without changing the fundamentals that make the XRPL reliable."

Ferran Prat, CEO of Peersyst, emphasized the broader impact on the XRP ecosystem:

"With the launch of XRPL EVM, we're unlocking a new era for XRP — one where it can flow seamlessly across the multichain world. This isn't the finish line; it's Day 1 of a much bigger journey toward interoperability, programmability, and utility at scale."

Yoni Assia, CEO of eToro, articulated the necessity of building proprietary infrastructure to support the company's growth and ambition in tokenized assets:

"We can't run today the millions of transactions that we're transacting on a monthly basis on existing blockchains. We'll need, by definition, to have a dedicated blockchain if we want to run the entire eToro ecosystem."

Broader Context

The ongoing shifts reflect a broader industry trend towards optimizing blockchain performance and addressing the limitations of earlier designs. The pursuit of high TPS and sub-second finality by Movement Network aligns with advancements seen in new Layer 1 contenders. For instance, Hyperliquid, a decentralized exchange, operates on a purpose-built L1 that can handle up to 100,000 orders per second with 0.2-second latency. Similarly, Monad aims for 10,000 TPS with one-second finality through parallel transaction execution, while The Open Network (TON) boasts a theoretical throughput of 125,000 TPS with sub-three-second finality.

The proliferation of EVM-compatible sidechains, exemplified by XRPL EVM Sidechain and HyperEVM, indicates a strategic choice to leverage Ethereum's developer ecosystem while achieving greater scalability and lower costs. This approach is also evident in specialized L1s like Berachain, which uses a Proof of Liquidity (PoL) consensus mechanism to incentivize network efficiency for DeFi applications. The move by major platforms like eToro and Robinhood into tokenized securities, utilizing frameworks like ERC20 and layer-2 solutions such as Arbitrum, highlights a growing institutional confidence in blockchain technology as a robust foundation for next-generation financial services. This strategic convergence of traditional and decentralized finance is driven by the clear benefits of reduced operational costs, enhanced liquidity, and continuous market access, reshaping the competitive landscape of digital asset trading. These developments collectively point towards a future where blockchain technology is not just an alternative, but an integrated and indispensable component of the global financial infrastructure.