An update could turn XRP into the crypto of tomorrow

The cryptocurrency landscape is evolving rapidly. The XRP Ledger (XRPL), in particular, is on the verge of a significant milestone with the highly anticipated XLS-30d amendment. This update is critical as it has the potential to transform XRP into the cryptocurrency of the future.

If passed, $XRP holders will be able to earn, for the first time, income on-chain. #XLS30 #AMM https://t.co/nSiNHU2R1g

— Panos 🔼{X} (@panosmek) August 27, 2023

XRP Ledger Reinventing Crypto Trading with AMM

At the heart of this transformation is the Automated Market Maker (AMM). This automated market maker platform will be directly integrated into the XRP Ledger’s blockchain.

The goal is to enable XRP crypto holders to participate in cryptocurrency trading without the need for permission. To achieve this, they will utilize liquidity pools instead of traditional order books. To ensure complete transparency, token prices will be determined using blockchain oracles.

On-Chain Revenues: A Double-Edged Opportunity for Crypto Investors

Investors who contribute crypto to liquidity pools will receive a portion of the fees collected on each transaction. However, these revenues come with the risk of impermanent loss. This loss occurs when price fluctuations alter the ratio of cryptocurrencies within the pool.

Analysis: Token providers may fare better if they simply hold the tokens in their crypto wallets. However, this loss is considered impermanent because the token ratio can be restored, allowing token providers to earn collected fees over time.

XRP Ledger: The AMM of the Future?

An AMM on the XRP Ledger would open doors to earning opportunities for XRP crypto holders. It would also enable users on the chain to seamlessly convert into other assets on the chain, significantly increasing XRP’s liquidity.

AMM offers other key advantages:

• It eliminates the need for intermediaries and order books, thus reducing transaction costs and delays.
• It ensures high liquidity and minimal slippage. Users can always trade with the pool, regardless of crypto market conditions.

Certainly, the XLS-30d amendment is not yet live on the XRP Ledger. It is expected to launch on September 11th. After its launch, validators will still need to vote for the deployment of the AMM. Nevertheless, this represents a crucial step for the future of the XRP Ledger and XRP crypto.