Amidst the ongoing rumors and hypotheses within the XRP Ledger (XRPL) community, Ripple’s Chief Technology Officer, David Schwartz, has offered some much-needed clarifications concerning the use of XRP and other digital assets on the forthcoming XRPL Automated Market maker (AMM). With the AMM launch just around the corner, there has been a great deal of excitement and speculation within the XRPL community. One topic that has generated significant discussion is the potential functionalities and features of the AMM, leading to various conjectures, particularly regarding whether the AMM would exclusively support XRP pools.
Addressing the speculations: AMM’s asset support
In response to a community member’s query on Twitter, Schwartz clarified that the upcoming AMM would indeed support multiple cryptocurrencies, not just XRP. This revelation comes amidst growing uncertainties, as numerous reports have mainly focused on the advantages for XRP holders regarding liquidity pools on the AMM. Publications like The Crypto Basic have underscored these benefits, primarily in terms of passive income generation for XRP holders. However, there has been less emphasis on the inclusion of other assets, contributing to the speculation that the AMM feature might be exclusive to XRP.
The expansive reach of XRPL AMM
According to Schwartz, the XRPL AMM is designed to accommodate any Automated Market maker instance involving two crypto assets supported by the XRP Ledger. This opens up a vast range of asset pairs, including CORE/XRP, FURY/USD, and CSC/RPR, as long as both assets are compatible with the XRPL. Schwartz’s clarification aims to expand the understanding of the AMM’s capabilities, emphasizing its inclusivity beyond just XRP.
Dominance of XRP in AMM pools
Despite the flexibility extended to market participants, Schwartz anticipates that XRP will dominate the AMM pools. He attributes this prediction to XRP’s leading status within the network and its role as the gas token. Although market participants have the freedom to engage in trades with various other assets, it is anticipated that XRP will maintain its prevalence within the AMM pools. Schwartz also refuted speculation about Ripple utilizing some of its escrowed XRP to bolster liquidity in the AMM pools, suggesting it could result in selling pressure on the asset.
Market reactions and implementation timeline
The rollout date for the AMM functionality is scheduled for March 22, following its approval by the minimum required consensus among validators on March 15. This milestone marks a significant advancement for the XRPL, anticipated to influence the network and its assets substantially. Some community members, including on-chain analyst Mr. Huber, ponder whether the AMM’s launch could impact XRP’s price, drawing comparisons with historical precedents from similar implementations on other networks.
As the launch date nears, stakeholders within the XRPL community are closely monitoring these developments. The broadened support for multiple assets underscores the XRPL’s commitment to fostering a diverse and adaptable ecosystem. With the approach of the launch date, the community remains attuned to potential shifts in market dynamics and XRP’s role within this innovative new AMM framework.
