- Ripple is set to upgrade its XRP Ledger with the integration of two notable features.
- The introduction of an Automated Market Maker (AMM) has generated considerable buzz concerning its potential effect on XRP’s price.
In light of our latest update on Ripple Price Rollercoaster: XRP Dances on Thin Ice, What’s Next?, recent advancements suggest that Ripple’s imminent upgrade to its XRP Ledger may lead to intriguing market dynamics. As Ripple gears up to roll out this groundbreaking update, speculations are rife about the potential implications for XRP’s price.
The Upcoming Features on XRP Ledger
Ripple’s much-anticipated upgrade to the XRP Ledger is slated to introduce two significant features: an automated market maker (AMM) and a clawback feature. However, the AMM stands out as the central topic of discussion for its prospective market impact.
The forthcoming AMM is designed to be non-custodial and will be seamlessly integrated into the Decentralized Exchange (DEX). This feature aims to enhance returns for those who provide liquidity to the AMM, all while mitigating the risks associated with market volatility.
According to official statements, the XLS-30 update will inaugurate a native AMM into the XRPL. This AMM will operate alongside the current order book DEX, facilitating digital asset trades within automated liquidity pools and broadening opportunities for DeFi developers and stakeholders.
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The Potential Impact on XRP’s Price
The introduction of the AMM has ignited discussions and speculations around its effect on the price of XRP. David Schwartz, Ripple’s CTO, addressed a pertinent query on this matter. An inquisitive user asked if the launch of the AMM, combined with a majority of XRP holders contributing to liquidity pools, could result in a decline in XRP’s price due to the AMM’s inherent mechanism of selling XRP to balance out the pools.
Schwartz responded by acknowledging the possibility of a short-term increase in selling pressure if the majority of AMM’s liquidity comes predominantly from XRP holders. However, he also expressed skepticism about the significance of this impact. Furthermore, Schwartz elaborated that the AMM is designed to counterbalance the market by selling when prices rise and purchasing when they drop, potentially converting market volatility into investment yield.
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