Cointelegraph Team
Cointelegraph
Ripple’s underlying XRPL blockchain is set to unlock a wide range of decentralized finance (DeFi) capabilities following the launch of a natively built automated market maker (AMM) protocol.
Ripple recently announced the release of the XLS-30 AMM protocol, built in partnership with the XRPL community, as a feature to benefit its blockchain ecosystem.
The AMM is expected to expand the DeFi capabilities of the XRPL ecosystem and enable cross-chain DeFi use cases across 50 blockchains.
XRPL’s blockchain ecosystem has an existing decentralized exchange (DEX) featuring a conventional order book, which does not include some of the advanced features that new DeFi protocols have pioneered over the past two years.
Related: Ripple CTO seeks community consensus for XRPL AMM feature adoption
A spokesperson from Ripple told Cointelegraph that the AMM lays the foundation for further DeFi development on the XRPL blockchain.
Integration with cross-chain messaging services like Axelar will broaden the reach and utility of XRPL-based DeFi solutions across several blockchain ecosystems.
The AMM has been in development since June 2022, as Ripple chief technology officer and XRPL co-founder David Schwartz reflected on in a recent X post.
Source: David Schwartz
The AMM aims to complement and expand the existing order book system with XRPL. XRPL’s DEX previously operated solely on order books, providing a capital-efficient trading mechanism for highly liquid pairs.
Ripple’s team noted that integrating the AMM with order books complements and expands on the existing DEX-powered ecosystem.
“By integrating the AMM with order books, traders can automatically receive the best price across both systems, while liquidity providers can earn yield on their excess liquidity,” the spokesperson added.
The AMM allows developers to enable the creation of liquidity pools for any pair of assets issued on XRPL. Ripple also confirmed that the AMM was not explicitly targeted at institutional trading entities but that its functionality might prove useful for high-volume traders or firms.
“While the AMM does not currently have built-in compliance features, it complements the existing order book DEX, which may be more suitable for large financial institutions trading popular tokens at high volumes,” the Ripple spokesperson said.
Adding the AMM to the existing order DEX is touted to provide a robust trading environment for a range of users, from retail traders to institutions.
Cointelegraph also understands that Ripple and XRPL are exploring incorporating on-chain regulatory compliance features in an effort to support institutional uptake of its protocol.
The AMM allows developers to enable the creation of liquidity pools for any pair of assets issued on XRPL. Ripple’s team believes that cross-chain messaging protocols will be key in attracting capital, crypto developers and traders from other blockchain ecosystems.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.
Recommended Content
Editors’ Picks
TRON gains 10% in 2024, supply of stablecoins reaches over $50 billion in Q1
TRON, a blockchain-based digital platform, has seen positive growth in the first quarter of 2024, as seen in a Messari report. TRON noted gains across several metrics like market capitalization, revenue and total value locked.
XRP hovers near $0.50 as Ripple CTO addresses concerns related to stablecoin launch
XRP is hovering near $0.53 on Friday, spending nearly all week below $0.55. Ripple CTO David Schwartz addressed concerns on stablecoin and XRP utility on Thursday.
Terraform Labs set to restrict access for users in the US after recent ruling in SEC lawsuit
Blockchain company Terraform Labs said Thursday that it will restrict access to some of its products and services for US-based users as it expects to receive a court order soon in light of its legal battle against the US Securities and Exchange Commission (SEC).
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s (BTC) recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Bitcoin: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s (BTC) recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.