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Highlights
- The XRP Ledger protocol has hit the 10 million XRP milestone
- The XRP Ledger is seeing impressive growth from both users and developers
- The price of XRP is yet to respond positively to the growth trends
The total amount of XRP pooled in the XRP Ledger (XRP) Automated Market Maker (AMM) which went live on the mainnet in Q1 2024, has surpassed 10 million XRP.
XRP Ledger AMM Attracting More Users
This new milestone was highlighted by XRPscan, a leading XRP Ledger explorer. It reflects the growing adoption and utilization of XRP in the Decentralized Finance (DeFi) ecosystem. The AMM feature went live on the XRPL mainnet in March.
Total XRP pooled in XRPL AMM has crossed 10M XRP: https://t.co/RR0LsMcvEG pic.twitter.com/cb6CRZnNpx
— XRPScan (@xrpscan) June 24, 2024
Noteworthy, AMMs are designed as unique Decentralized Exchanges (DEXs). Their mechanism hinges on the use of liquidity pools to algorithmically price assets instead of creating offers of preset specifications. With liquidity pools, holders are able to earn a significant portion of trading fees after they have offered their tokens as liquidity.
For XRPL, its transactions, particularly for fungible tokens, are handled by a built-in Central Limit Order Book (CLOB). The CLOB has been an integral part of the XRPL since its inception. Two core perks of the order book are fewer trust assumptions and centralized liquidity. This takes care of the inherent vulnerabilities of smart contracts. It was not until recently that the AMM joined the CLOB on XRPL.
The increase in the total pooled XRP on the XRPL AMM is likely to attract more participants to the ecosystem. Oftentimes, these entities are concerned with increased liquidity, an offering that XRPL AMM provides. Therefore, this could mark the beginning of more user participation which may birth further innovations, novel financial products and the overall boost of the DeFi niche.
Misconceptions About XRPL AMM
Still on the subject of liquidity, there are confusion in the crypto community as to whether users of the XRP Ledger AMM would have to provide XRP as liquidity. Anodos Finance co-founder Panos Mekras tool to X to offer explanations to this XRP Ledger misinformation.
Mekras explained to his followers that providing liquidity should be taken as a separate income strategy. As such, he noted that this would not require users to add the XRP that they plan on holding.
“As a liquidity provider, you care about income and fees earned by the trading activity. It’s better if you don’t care if you end up with more on one side and less on the other. Total profit is what matters,” the Anodos Finance executive added.
With the news of the $10 million XRP pooled in the XRPL AMM, XRP price is yet to improve significantly as it currently trades at $0.4728 with a 1.84% decrease over a 24 hour period.
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