- Following a brief stoppage, XRPL’s AMM features returned with a notable boost in liquidity, quickly surpassing 2.1 million XRP locked.
- AMM functionalities could cause an XRP supply shock in the future, even though only a small portion of the entire supply is locked.
Lately, the XRP Ledger (XRPL) has demonstrated notable expansion in both robustness and features, mainly due to important integrations in the decentralized finance (DeFi) domain.
One significant development in this evolution has been the introduction of Automated Market Maker (AMM) features, which have sparked speculation about an upcoming supply shock of XRP and drawn involvement from the network.
XRPL Reviving by Integration of AMM
The XRP locked in XRPL AMM pools has increased significantly—beyond the 2.1 million threshold, as verified by the dUNL validator Vet.
XRP Ledger Automated Market Maker reached 2.1M XRP locked liquidity 🤗
Most noticeable:
Over 300 pools and 179 XRP pairs !Nr.1 Pool is the XRP/USDC (GH) pic.twitter.com/LcKzR7REcT
— Vet 🏴☠️ (@Vet_X0) April 15, 2024
This precipitous rise occurred just four days following a major upgrade to the XRP Ledger’s Automated Market Maker (AMM) engine, formally known as “fixAMMOverflowOffer,” has been introduced, as previously reported by ETHNews.
Since the upgrade was implemented, trading has resumed and liquidity has increased. Shortly after operations resumed, total XRP locked reached 820K and eventually increased to 2,175,911 XRP, which echoed by influencer Zach Rector.
Supply Shock dynamics for XRP coming into play…
2 Million XRP in AMM pools already
— Zach Rector (@ZachRector7) April 15, 2024
Growth of AMM and Cryptocurrency Liquidity
The network recovered quite quickly, which was excellent considering the operational hiccup where a redemption and withdrawal spree temporarily stopped the AMM functionality, lowering locked XRP to just 279,000. The prompt action and the fixes that followed gave the ecosystem’s integrity and user confidence a significant boost.
In terms of money, the locked XRP is currently worth about $1.05 million, which is determined by the current exchange price of $0.4878 per XRP, according to CoinMarketCap. This price has decreased by 0.30% during the past day, which is similar to a notable 20.08% decrease over the previous week.
These kinds of swings are typical in the wild world of cryptocurrency markets, but the growing lock-up of XRP in AMM pools suggests that there may be less supply available, which may have an impact on future price changes.
Future Outlook: Supply Shock Speculation
Currently, 317 active AMM pools—180 of which contain XRP—are housed in the XRPL. With 473,174 XRP, the USDC/XRP pool has the biggest volume.
The capacity of the ledger to support a dynamic trading environment—which is rapidly gravitating toward more automated and decentralized trading mechanisms—is highlighted by the increasing number of pools and the growing volume of locked currency.
Notwithstanding the extremely little quantity of XRP locked in relation to its circulating supply (only 0.0039%), market observers and enthusiasts—headed by individuals such as influencer Zach Rector—assert that the current events may cause a supply shock.
A scenario like this would be mostly dependent on the market dynamics and the ongoing adoption of AMM features. You can watch the video below to learn more about this development.