Crypto Experts Say AMM on XRPLedger Will Boost Ripple and XRP

The XRPLedger is set to introduce Automated Market Makers (AMMs), which offer XRP holders the chance to earn passive income by providing liquidity to pools. By depositing their XRP, holders can earn a share of the earnings and receive pool tokens, while also having the ability to vote on trading charges. Stedas, a well-known crypto influencer, has provided a comprehensive guide on how to earn passive income through this new feature.

So, what does this mean for you? Let’s dive into the details.

To understand how this new feature works, it’s important to grasp the mechanics behind it. The XLS-30 AMM Amendment aims to simplify the deployment of AMMs on the XRPL by eliminating the need for custom code. This will result in increased liquidity, improved price discovery, and reduced fees. However, there are potential risks related to market volatility and centralization. The amendment is currently in the voting process and is expected to be integrated into the XRPL Mainnet by Q1 2024. AMMs function by holding asset pools and adjusting exchange rates based on the balances.

In addition to the introduction of AMMs, the XLS-30D Amendment has brought forth some added features. LP Tokens represent shares of the asset pools, and anyone can create or deposit assets into an AMM. The amendment also includes new transaction types, the ability to vote on fees, and a continuous auction mechanism. These changes integrate AMM functionality into the XRPL and address impermanent loss by distributing fees. The AMM interacts with the XRPL’s limit order book-based DeX, providing users with access to all liquidity.

Now, let’s talk about the chances of earning passive income through the XRPL Ledger AMM. The upcoming deadline for the SEC v. Ripple lawsuit on March 22 may have an impact on the price of XRP due to Ripple’s significant holdings. However, the introduction of AMMs is expected to have a positive effect on both XRP and Ripple. The activation of AMMs is set to occur by March 22.

According to a report by Coinpedia, Ripple’s CTO, David Schwartz, is eager to utilize AMMs for institutional payments, taking advantage of the liquidity they provide on the DEX to facilitate smoother transactions. In discussions about earning passive income through the XRPL Ledger AMM, Schwartz clarified that it requires actively trading XRP for claims against AMM pools, rather than simply holding the asset. This clarification aims to address misconceptions about DeFi and promote realistic expectations. Schwartz also emphasized the importance of individual control over assets and rejected calls for burning excess XRP from escrow, stating that such decisions should remain in the hands of the owner.

In a post on X, a renowned crypto expert named WrathofKahneman stated that it is acceptable to consider earning through the XRPL AMM as passive income, as it involves letting the machine trade XRP. They likened it to real estate investments and rentals, which are also considered passive income sources. However, it’s important to note that participants should not expect guaranteed profits from this venture.

Now, let’s take a look at the current snapshot of XRP’s price. Remarkably, XRP has maintained a steady price above the critical $0.60 level. However, technical indicators suggest a potential correction in the near future, with the altcoin possibly testing support levels around $0.5553. In a bullish scenario, XRP could reclaim the $0.6293 level, indicating further upward momentum. The next significant resistance level is at the 2024 peak of $0.6685.

So, do you believe that AMMs present an exciting opportunity for XRP holders to achieve guaranteed profits?