Ripple’s David Schwartz Announces XRP Ledger Mainnet Launch of XLS-30 AMM
Ripple's Chief Technology Officer, David Schwartz, recently shared news on the XRP Ledger mainnet launch of the XLS-30 AMM (automated market maker) via X.
Alongside this announcement, Schwartz offered cautionary advice to users venturing into trading via the AMM, stressing the importance of adhering to guidance provided.
In a recent blog post, developers at RippleX disclosed the implementation of the non-custodial XLS-30 AMM into the XRP Ledger, heralding a transformative shift in liquidity and trading dynamics on the network. Specifically designed for the XRPL DEX (decentralized exchange), the AMM is poised to enable users to generate returns by contributing liquidity and aims to mitigate slippage for traders dealing with less frequently traded tokens. Additionally, developers will have the opportunity to leverage XLS-30 to integrate with the AMM and develop their own interfaces for trading and liquidity provision.
Schwartz’s cautionary remarks underscore potential risks for traders utilizing AMMs on the DEX. He highlighted the risk of losses if traders deposit single-sided assets into AMMs with lower liquidity than the deposited assets themselves, and advised traders to consider alternative options in the event of significant slippage during the deposit process.
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Furthermore, Schwartz addressed the risk of losses should traders deposit assets into AMMs that were significantly imbalanced prior to the deposit. While such occurrences are expected to be infrequent, Schwartz pointed out that persistent imbalances represent missed profit opportunities for all participants.
He recommended a balanced approach, suggesting that traders deposit equal values of both assets traded by the AMM. Alternatively, if traders opt for single-sided deposits, Schwartz advised selecting AMMs with reasonable liquidity, noting that the risk of losses should diminish as AMM pools expand and more arbitrageurs engage in trading against these pools.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
