XRPL AMM Launch Sparks Speculation

Despite concerns, the XRPL AMM is set to launch on March 22, with some predicting it could impact XRP’s price negatively.

As the XRPL Automated Market Maker (AMM) is scheduled to go live within the next three days, the XRPL community has been engulfed in discussions regarding its functionality and features, giving rise to numerous conjectures.

One such conjecture is whether the AMM is exclusive to XRP. Davis Schwartz responded to a question posed by a community member in a recent X post regarding whether the forthcoming AMM would support multiple assets in addition to XRP pools exclusively. 

This uncertainty results from the fact that the majority of AMM feature reports concentrate on XRP. 

Nonetheless, there are few discussions regarding this possibility for other assets, concluding that the feature may only support XRP.

Moreover, Jasmine Cooper, the lead product manager at Ripple, emphasized in November of last year that the XRPL AMM could assist in enhancing the utility of XRP, thereby contributing to the mounting speculation. 

Schwartz verified, in response to a recent inquiry, that the AMMs would support additional cryptocurrencies in addition to XRP.  

Market participants may generate any AMM instance using two crypto assets supported by the XRP Ledger, per the CTO of Ripple. This may involve CSC/RPR, FURY/USD, or CORE/XRP.

The sole requirement is that both assets be listed on the XRPL. Nevertheless, Davis Schwartz emphasized that despite market participants’ freedom to trade other assets, he anticipates XRP to dominate the pools.

He predicted that XRPL AMM pools, in which XRP is included as one of the assets, would be the most popular. This is the result of XRP’s gas token and its status as the dominant asset on the network.

Additionally, some community members have begun to speculate that Ripple may utilize some of the escrowed XRP to provide liquidity on an AMM.  

However, David Schwartz rejects this strategy because it would induce selling pressure. This sentiment was echoed by Panos Mekras, the proprietor of Anodos Finance, who emphasized that Ripple’s provision of XRP exclusively for AMMs would be detrimental to the asset. 

Potential Impact of XRPL AMM Launch on XRP Price

In the interim, the XRPL AMM functionality is scheduled to be implemented on March 22, seven days after the amendment regained consensus among the minimum number of validators on March 15.

Citing Stellar’s past, on-chain investigator Mr. Huber believes implementing the feature could cause XRP’s price to decline.