Ripple’s XRPL blockchain is set to unlock a myriad of decentralized finance (DeFi) capabilities with the introduction of its natively built automated market maker (AMM) protocol, XLS-30.
Recently announced by Ripple, the XLS-30 AMM protocol was developed in collaboration with the XRPL community to enhance the blockchain ecosystem.
The AMM protocol is expected to broaden the DeFi capabilities within the XRPL ecosystem and facilitate cross-chain DeFi use cases across 50 different blockchains.
By integrating with cross-chain messaging services like Axelar, the XRPL-based DeFi solutions are poised to reach a wider audience across various blockchain ecosystems.
The development of the AMM protocol commenced in June 2022, reflecting Ripple’s commitment to advancing DeFi capabilities on XRPL, as highlighted by Ripple’s CTO and XRPL co-founder, David Schwartz.
The AMM protocol aims to complement and expand upon XRPL’s existing decentralized exchange (DEX), which operates on order books, by introducing additional liquidity pool capabilities.
Traders can automatically access the best prices across both AMM and order book systems, while liquidity providers can earn yield on their excess liquidity, enhancing the trading experience for all participants.
While not explicitly targeted at institutional trading entities, the AMM’s functionality may prove beneficial for high-volume traders or firms. Ripple is exploring incorporating on-chain regulatory compliance features to support institutional adoption.
The integration of the AMM protocol with XRPL’s existing order book DEX is expected to create a robust trading environment catering to a diverse range of users, from retail traders to institutional investors.
Ripple and XRPL are optimistic about the potential of cross-chain messaging protocols to attract capital, crypto developers, and traders from other blockchain ecosystems, further enhancing the XRPL ecosystem’s growth and interoperability.
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