XRP Ledger (XRPL) AMM Tops 10M XRP, Price Shows Unexpected Move

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As a seasoned crypto investor with a deep interest in the DeFi space and a long-term XRP holder, I’m excited to see the growing adoption and utilization of XRP within this ecosystem. The recent milestone of over 10 million XRP pooled in the XRP Ledger Automated Market Maker (AMM) is a significant step forward, reflecting the confidence that users have in XRPL and its potential as a decentralized finance platform.

In the XRP Ledger’s automated market maker (XRP AMM), which was launched on the mainnet during Q1 2024, the aggregate XRP supply now exceeds 10 million XRP.

XRP Ledger AMM Attracting More Users

As a researcher studying the XRP Ledger and Decentralized Finance (DeFi) sector, I’m excited to note that XRPscan, a renowned explorer for this platform, has recently brought attention to a significant development. The activation of an Automated Market Making (AMM) feature on the mainnet in March is a testament to the increasing use and acceptance of XRP within the DeFi ecosystem.

Total XRP pooled in XRPL AMM has crossed 10M XRP:
— XRPScan (@xrpscan) June 24, 2024

Significant difference: Automated Market Makers (AMMs) operate unlike traditional centralized exchanges. Instead of relying on set bids and asks, these DEXs utilize liquidity pools for algorithmic asset pricing. By contributing their tokens to these pools, providers receive a substantial share of trading fees.

As a researcher studying the XRP Ledger (XRPL), I’ve discovered an essential aspect of its transaction processing, specifically for fungible tokens. The XRPL is equipped with a built-in Central Limit Order Book (CLOB). Since the inception of XRPL, this order book has played a pivotal role. Two primary advantages of the CLOB are the reduction of trust assumptions and the provision of centralized liquidity. By managing transactions in this manner, it effectively addresses the potential vulnerabilities associated with smart contracts. It’s noteworthy that only recently has an Automated Market Maker (AMM) been integrated into the XRPL CLOB.

As a researcher studying the XRP market on the XRPL Automated Market Maker (AMM), I’ve noticed an intriguing trend. The expansion of the total XRP reserves in the AMM is likely to pique the interest of more entities, drawn in by the allure of enhanced liquidity this platform provides. This increased participation could lead to a wave of new users, spurring further innovations and the creation of advanced financial products within the Decentralized Finance (DeFi) sector on XRPL.

Misconceptions About XRPL AMM 

As a researcher exploring the topic of liquidity in the crypto community, I’ve come across some confusion regarding the requirement for users of the XRP Ledger Automated Market Maker (AMM) to provide XRP as part of the liquidity pool. To help clarify this misconception, I reached out to Panos Mekras, co-founder of Anodos Finance, for insights.

As a researcher studying financial strategies, I’d like to share an insight from Mekras: treating liquidity provision as a distinct income source is crucial. Contrary to popular belief, it doesn’t necessitate adding XRP for holding purposes.

From a liquidity provider’s perspective, I prioritize earnings from trading activities, be it income or fees. I am indifferent to any imbalance in the quantity of assets held as a result. My focus remains on attaining a positive total profit.

The revelation of a $10 million XRP fund in the XRPL Automated Market Maker has not led to a noticeable surge in XRP’s price, as it is presently valued at $0.4728 and has dropped by 1.84% within the last 24 hours.

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2024-06-24 21:00