XRPL AMMs Offer Promise of Enhanced Liquidity and Voting Authority, Potentially Boosting XRP
XRPL Introduces AMMs: Earn Passive Income with XRP Liquidity
If you’re looking to boost your XRP holdings, the XRPLedger has some exciting news for you. They have recently introduced Automated Market Makers (AMMs), allowing XRP holders to earn passive income by providing liquidity to pools.
With AMMs, not only do you get a share of the earnings, but you also have the power to influence trading charges through your deposits. Stedas, a crypto influencer, has even offered a guide on earning passive income through this innovative addition.
The XLS-30 AMM Amendment is set to be a game-changer. This proposal aims to integrate automated market maker functionality seamlessly into the XRPL without the need for custom code. The benefits of this amendment include increased liquidity, improved price discovery, and reduced fees. However, it’s important to keep in mind the potential market volatility and centralization risks. The amendment is currently undergoing a voting process for integration into the XRPL Mainnet, expected in Q1 2024.
In addition to the XLS-30 AMM Amendment, the newly introduced XLS-30D Amendment brings added features. LP Tokens represent shares of the pools, and anyone can create or deposit assets into an AMM using this amendment. It also introduces new transaction types, voting mechanisms for fees, and a continuous auction system to mitigate impermanent loss by distributing fees. The AMM seamlessly interacts with XRPL’s decentralized exchange, ensuring users have access to a dynamic liquidity pool.
While we eagerly await the integration of AMMs into the XRPL Mainnet, the SEC v. Ripple lawsuit casts a shadow over Ripple. The upcoming deadline on March 22 may impact XRP’s price due to Ripple’s significant holdings. However, the introduction of AMMs is expected to have positive effects on both XRP and Ripple, with activation also expected by the same deadline.
Ripple’s CTO, David Schwartz, has expressed his eagerness to utilize AMMs for institutional payments, benefiting from the liquidity they provide on the DEX. He explained that earning passive income through the XRP Ledger AMM requires trading XRP for claims against AMM pools, not just holding. This aims to address myths about DeFi and promote realistic expectations. Schwartz also emphasized individual control over assets, rejecting calls for burning excess XRP from escrow as it should remain the owner’s decision.
While earning through XRPL AMMs can be likened to passive income, it’s important to note that participants are not guaranteed profits. Crypto expert WrathofKahneman compares it to real estate investments and rentals, but cautions against expecting guaranteed profits.
Despite regulatory uncertainties and the ongoing lawsuit, XRP’s price has remained resilient above the critical $0.60 level. Technical indicators suggest a potential correction in the near term, with support levels around $0.5553. In a bullish scenario, XRP could reclaim the $0.6293 level and pave the way for further upward momentum. The peak of $0.6685 awaits in 2024.
The XRPLedger is ushering in a new era of possibilities with AMMs, and the excitement is contagious. So gear up, XRP enthusiasts, because there are exciting times ahead!