The XRP decentralized financial ecosystem is managed by the decentralized network XRP Ledger (XRPL) and has evolved since adopting automated market maker (AMM) functionality.
According to a post by XRPScan on X (formerly Twitter), the first AMM liquidity pool was created just minutes after the AMM feature went live. Some pools currently hold hundreds of millions of tokens and support pairs such as XRP/USD and XRP/BTC.
Automated Market Makers (AMMs) rely on mathematical algorithms to quote prices for cryptocurrencies and facilitate user trades through liquidity poles. This approach allows anyone to participate as a liquidity provider and receive trading rewards, and users can gain instant liquidity through the pools mentioned above.
Bringing DeFi enhancements to XRPL
Ripple Labs has announced that the XRP Ledger will be adding an AMM engine to the network. After a year of extensive research and development, this feature is finally available to the public.
Adding the AMM engine to XRPL will facilitate token swaps and liquidity raising, making it more accessible to users and benefiting decentralized applications (dApps), especially decentralized exchanges (DEXs).
Additionally, this feature is poised to facilitate the creation of bridges, foster innovation within the XRP ecosystem, and enable seamless interaction with other blockchain networks.
This means that as more decentralized applications are introduced to XRPL, the price of XRP may rise as more users trade their tokens and pay transaction fees. . Additionally, more protocols will start using tokens to reward the tasks of network validators.
Meanwhile, XRP price fell 3% on a weekly scale to settle at $0.61, according to CoinMarketCap data. This may be a result of the overall market downturn. Bitcoin (BTC) and Ethereum (ETH) fell to $64,000 and $3.3,000, down 7% and 10% for the week, respectively. However, analysts predict that in the near future, XRP will enter a new bull market, with XRP hitting multi-year highs.
