According to CryptoPotato, the XRP Ledger (XRPL), a public blockchain designed for quick, low-cost, real-time transfer of fiat currencies, XRP, and other digital assets, has reached a significant milestone. Over 10 million XRP tokens have been locked in its automated market maker (AMM) pools, indicating a rise in investor confidence. However, this number has seen a slight decrease in recent hours, with approximately 8.9 million XRP locked across nearly 600 AMM pools.
AMMs aim to provide liquidity in the XRPL's decentralized exchange. Each pool consists of two assets, and users can swap between them at an exchange rate determined by a formula. Those who lock XRP in the pools, known as liquidity providers, receive LP tokens (yield) from the AMM in return for their stake.
Despite XRP's price stagnating over the past few weeks, the increased stake in AMM pools generally signals a rise in investor confidence. The cryptocurrency appears to be on the brink of a significant move, as its price has been squeezed within the current range for an extended period, indicating a balance between buyers and sellers. This equilibrium typically doesn't last long, and the direction of the breakout is likely to determine Ripple's trend in the mid term.