The XRPL blockchain, foundational to Ripple’s operations, is poised to revolutionize decentralized finance (DeFi) with its newly launched automated market maker (AMM) protocol, XLS-30.
This development, a collaborative effort with the XRPL community, is designed to enrich the blockchain’s ecosystem significantly.
Ripple‘s announcement of the XLS-30 AMM protocol marks a pivotal expansion in the XRPL ecosystem’s DeFi capabilities, facilitating cross-chain DeFi applications across 50 blockchain platforms.
This innovation aims to complement XRPL’s existing decentralized exchange (DEX), which primarily operates on a traditional order book model lacking the advancements seen in newer DeFi protocols.
A Ripple spokesperson highlighted to Cointelegraph that the AMM is a foundational step towards broader DeFi developments on the XRPL blockchain.
Furthermore, integrating with cross-chain messaging services like Axelar is expected to extend XRPL-based DeFi solutions’ reach and utility across various blockchain ecosystems.
Ripple CTO and XRPL co-founder David Schwartz has shared insights on the AMM’s development journey since June 2022, emphasizing its role in enhancing the DEX’s order book system.
This integration is anticipated to offer optimal pricing by merging AMM and order book systems, while also providing liquidity providers with yield opportunities on their idle assets.
The introduction of liquidity pools for any asset pair issued on XRPL by the AMM aims at a broader user base, including high-volume traders and firms, despite not being specifically designed for institutional traders.
The lack of built-in compliance features in the AMM is seen as complementary to the DEX’s suitability for large financial institutions engaged in high-volume trading of popular tokens.
This new addition to the XRPL DEX is expected to create a more dynamic trading environment for a diverse range of participants, from retail investors to institutional players.
Efforts are underway to include on-chain regulatory compliance mechanisms to further facilitate institutional engagement with the protocol.
The collaboration between Ripple and the XRPL community in developing the AMM underscores the potential of cross-chain messaging protocols to attract investment, developers, and traders from across the blockchain spectrum, promising a more interconnected and efficient DeFi landscape.
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