Ripple Unveils XLS-30 AMM Protocol to Boost XRPL's Decentralized Finance Capabilities
Summary:
Ripple's XRPL blockchain is set to enhance its decentralized finance (DeFi) features with the launch of a built-in automated market maker protocol, known as the XLS-30 AMM. The new protocol, developed with the XRPL community, will expand the blockchain's DeFi capabilities and allow cross-chain use across 50 blockchains. While not specifically designed for institutional trading entities, the protocol can benefit high-volume traders and firms. Ripple and XRPL are also exploring on-chain regulatory compliance features to encourage institutional use of the protocol.
The XRPL blockchain of Ripple is about to boost its decentralized finance (DeFi) capabilities significantly, thanks to the introduction of an automated market maker protocol built right into the system. The XLS-30 AMM protocol, crafted in collaboration with the XRPL community, was unveiled recently by Ripple, extending its impact on the blockchain network. By ensuring compatibility with 50 blockchains, the AMM is set to broaden the scope of XRPL's DeFi functionalities, enabling DeFi operations across multiple chains.
There is already a decentralized exchange (DEX) based on XRPL’s blockchain, which uses a traditional order book trading system. Nonetheless, it does lack certain advanced features that recently developed DeFi protocols have been introducing.
Ripple's representative informed Cointelegraph that the AMM facilitates further DeFi evolution on the XRPL blockchain and that wider applicability and usefulness of XRPL-devised DeFi solutions across numerous blockchain systems will be achieved through the integration with cross-chain messaging services, such as Axelar.
Ripple CTO and XRPL co-founder, David Schwartz, shared his thoughts on the AMM's development since June 2022 in a recent post. The protocol is designed to evolve and enhance the existing order book system with Ripple's XRPL. The standard DEX of XRPL had previously focused only on order books, providing an effective way to trade for highly liquid pairs. The integration of the AMM with the order book system is believed to augment and extend the current DEX-led ecosystem.
This integration enables traders to receive the best price from both systems automatically, and liquidity providers can generate yield on their spare liquidity, the Ripple spokesperson added. AMM permits developers to establish liquidity pools for any asset pair issued on Ripple's XRPL.
Ripple stated explicitly that the AMM was not designed particularly for institutional trading parties but may be beneficial for firms or traders with high-volume transactions. The spokesperson for Ripple disclosed that introducing the AMM to the existing order book DEX is expected to create a vigorous trading environment for a diverse set of users, from individual traders to institutions.
Furthermore, Ripple and XRPL are looking into adding on-chain regulatory compliance features to facilitate institutional adoption of its protocol. Also, Ripple's team thinks that cross-chain messaging protocols will play an essential role in drawing investments, developers, and traders dealing with cryptocurrencies from other blockchain networks.
Published At
3/27/2024 12:11:01 PM
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