A popular figure from the XRP community claims that the XRP Ledger is on the eve of a transformation that would change the way institutional capital works with decentralized infrastructure. The comment was based on the newly proposed AMM Swappable Curves standard, which aims to improve XRPL’s proprietary automated market maker beyond the existing XLS-30 design. The proposal is still in the community review and modification phase, but it is already an important topic of conversation among XRP supporters.
XRPL’s native AMM could make a major amendment
The current XRPL native AMM is based on XLS-30, which brought automated market maker functionality to the XRP Ledger and connected it directly to the network’s decentralized exchange. This allows XRPL trades to leverage AMM pools, the order book, or a combination of both, depending on where liquidity is best available.
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The proposed The AMM Swappable Curves standard would build on that foundation by introducing a pluggable curve architecture. According to to the posted concept under XRPL Standards discussion #547 on GitHub, pool creators could choose the invariant function when creating the pool. The initial set includes ConstantProduct, ConcentratedLiquidity and StableSwap curves, with Smart AMM pools reserved for a later companion specification.
Furthermore, the current XLS-30 model uses a single constant product structure. Constant product pools are useful for volatile pairs, but they spread liquidity across the entire price range. The new proposal is because this is inefficient for correlated assets, especially stablecoin pairs, FX pairs and tokenized assets that typically trade near a narrow value range.
Biggest institutional unlock XRP has ever seen
X Finance Bull described the proposed AMM Swappable Curves updates on the XRP Ledger as possibly the biggest institutional unlock XRP has ever seen, and XRPL’s own DEX is about to receive a major liquidity infrastructure upgrade.
According to him, the upgrade is similar to the kind of innovation that helped turn Uniswap V3 into a dominant DeFi trading platform on Ethereum, but with the benefits of the XRP Ledger: burnt fees, fast transaction settlement and very low transaction fees.
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He explained that the quality of implementation is the main reason why institutions are concerned. Large stablecoin swaps between RLUSD and USDC could be executed without any price impact, which is the kind of standard banks require before moving serious volume through any venue. From here there is tighter settlement of currency pairs and more practical RWA trading on an institutional scale could follow as liquidity becomes more efficient.
X Finance Bull also highlighted the benefits for capital providers, noting that they could achieve higher returns by concentrating liquidity where it matters most, rather than spreading it thinly across the market. This will create a flywheel effect, where better pools attract more volume, higher volume attracts more liquidity providers, and better liquidity attracts larger institutions. XRPL becomes competitive at every major DeFi location on earth.
Featured image created with Dall.E, chart from Tradingview.com