Ripple Releases Automated Market Maker Feature To Unlock Huge DeFi Potential• December 4, 2022 8:10 pm • Comments
Ripple has just released a new feature which would greater increase the potential of the liquidity of XRP and make it much more competitive in the growing DeFi industry.
This specific new feature is called the automated market maker or AMM for short and the announcement was made during a devnet.
Essentially, what makes this AMM significant is the fact that it allows developers on the XRP blockchain ecosystem to be able to integrate their applications directly into the AMM.
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This is essential for services and applications that involve trading activity or utilize liquidity providers which may attract a lot of blockchain developers to move onto the Ripple platform.
Strong organic growth of the developer community is usually an indicator of an ecosystem’s future growth and this may mean more long-term potential for XRPL.
— RippleX (@RippleXDev) November 29, 2022
This is a protocol-native AMM that is integrated into the order book-based DEX on the XRP Ledger. Developers can now integrate their applications directly into the AMM to enable powerful applications for their users.
XLS-30d will exist as the core primitive of the ledger and will use a set of fixed features that allow application developers to create interfaces for end traders and liquidity providers (LPs).
In addition, XLS-30d includes a novel auction mechanism that incentivizes arbitrageurs while reducing the impact of volatile losses for LPs.
Ripple CTO David Schwartz emphasized in June that the XRP Ledger has built-in decentralized exchanges, including all features such as peer-to-peer lending, sophisticated multi-hop payment functions, and so on.
Ripple CTO David Schwartz also commented that the new AMM feature that was just released puts the XRP ledger in a competitive position.
The reason for this is because it allows liquidity providers to take a significant share of profits that would have previously when to arbitragers.
As a result, more liquidity providers are then incentivized to use Ripple’s automated market makers which makes the whole Ripple ecosystem more efficient and reliable than any other alternative on the market.
By extension, this enables Ripple to continue to expand and solve major problems within the decentralized finance space as the DeFi space has traditionally lost a lot of capital to these arbitragers.
— Blockchain Journal (@BC_Journal_News) November 30, 2022
The idea is that XRPL makes AMM arbitrage faster and less risky, while increasing profits for liquidity providers and increasing overall liquidity in the system; “a win-win for everyone.”
The upgrade has the potential to bring deeper liquidity to the XRP ecosystem and can also be a huge On-Demand Liquidity (ODL) expansion enabler under certain circumstances.
After extensive testing and feedback from the community, RippleX plans to propose a change to add XLS-30d to the XRPL mainnet. Like any upgrade, XLS-30d will then have to clear the hurdle of an 80% approval from all validators on the XRP Ledger.
At press time, the XRP was trading at $0.4017, facing a major resistance at $0.4189.
David Schwartz mentioning the "planned secret sauce" which is the AMM…
Now even if ODL wouldn't connect with the DEX / liquidity pool at this moment, we don't know what Ripple has planned for the future…
David has also said xRapid (ODL) is not aimed at banks. Find it.
— Anders 🏁 (@X__Anderson) December 2, 2022
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