Ripple CTO Shares Thoughts on AMM Feature and XRP Price
Ripple’s Chief Technology Officer (CTO), David Schwartz, recently addressed concerns within the XRP community regarding the potential impact of the Automated Market Maker (AMM) feature on the price of XRP. In a post on X (formerly Twitter), Schwartz expressed his belief that the AMM functionality on the XRP Ledger will not have a significant effect on the price of XRP. He acknowledged that new strategies, such as arbitraging against the decentralized exchange (DEX), can influence token prices, but he argued that this volatility harvesting strategy is unlikely to reduce XRP’s price volatility in the near future.
Schwartz explained that his reasoning stems from the fact that DEX trading activity on the Ripple Ledger represents only a small portion of overall XRP trading. He noted that while the DeFi landscape in the XRP ecosystem is growing, it still lags behind platforms like Ethereum and Solana. Therefore, for DEX trading volume to play a crucial role in determining the price of XRP, it would need to increase significantly.
The AMM feature was initially expected to go live in September 2023 with the release of Rippled version 1.12. However, this did not happen as validators needed to vote on enabling the amendment first. The proposal finally received enough “Yes” votes from validators this year, meeting the required 80% threshold for approval.
Update on the Launch of AMM Feature
Despite receiving approval from validators, the AMM feature has yet to be implemented on the XRPL Ledger. Schwartz clarified that it would not be included in Rippled version 2.1 due to insufficient time for implementation and potential amendment blocking. He stated that an additional week or two would be necessary before the AMM amendment can take place.
However, no further updates have been provided since then. According to XRPL validator Vet, just over 31% of node operators are currently running on the latest rippled version. This suggests that it may take some time before these validators prioritize the implementation of the AMM functionality.
As of now, the price of XRP is trading at around $0.5544, representing an increase of almost 3% in the last 24 hours, according to data from CoinMarketCap.
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