The decentralized finance ecosystem in XRP, managed by its decentralized network XRP Ledger (XRPL), has progressed after adopting the automated market maker(AMM) functionality.
Per a post on X (formerly Twitter) by XRPScan, the first AMM liquidity pools were created just a few minutes after the AMM features went live. Some pools now hold hundreds of millions of tokens, supporting pairs such as XRP/USD and XRP/BTC.
AMM is now live on XRPL mainnet! First few pools are rolling in 😀 – https://t.co/RR0LsMcvEG pic.twitter.com/epnT2QESzS
— XRPScan (@xrpscan) March 22, 2024
Automated Market Makers (AMMs) rely on mathematical algorithms to quote cryptocurrency prices and facilitate trades for users through liquidity pols. This approach enables anyone to participate as a liquidity provider to receive trading rewards, and users get instant liquidity through the pools above.
Bringing DeFi Enhancements to XRPL
Ripple Labs announced that the XRP Ledger intended to add an AMM engine into its network. After a year of extensive research and development, the feature is finally live.
Adding the AMM engine to XRPL facilitates token swapping and liquidity sourcing, making it more accessible to users and benefiting decentralized applications (dApps), especially decentralized exchanges (DEX).
Moreover, the feature is poised to facilitate the creation of bridges, fostering innovation within the XRP ecosystem and enabling seamless interaction with other blockchain networks.
This means that as more decentralized applications come to XRPL, XRP could see a boost in price as more users trade the token or pay transaction fees. Moreover, more protocols would begin using the token to reward network validators for their tasks.
Meanwhile, XRP’s price has decreased by 3% on the weekly scale, settling at $0.61, as per data from CoinMarketCap. It could be said that this is a result of the overall market downturn, with Bitcoin (BTC) and Ethereum (ETH) falling off to $64K and $3.3K, a weekly decrease of 7% and 10% drop, respectively.However, analysts foresee a new bull run for XRP in the near future, with XRP hitting multi-year highs.
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