XRP, the seventh largest cryptocurrency, recently reached a significant milestone on the decentralized finance (DeFi) market. According to XRPscan, a leading XRP Ledger explorer, the total amount of XRP pooled in the XRPL Automated Market Maker (AMM) has surpassed 10 million XRP. This milestone highlights the growing adoption and utilization of XRP in DeFi.
Automated market makers (AMMs) are a sort of decentralized exchange mechanism that uses liquidity pools to algorithmically price assets rather than creating offers of preset specifications. Liquidity pools enable holders to earn a portion of trading fees by offering their tokens as liquidity.
In the case of XRP Ledger, a built-in central limit order book (CLOB) handles all XRPL transactions for fungible tokens. This CLOB has been part of the XRPL since its inception and offers the advantages of fewer trust assumptions and centralized liquidity, as opposed to the inherent vulnerabilities of smart contracts.
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In addition to the existing CLOB, an automated market maker (AMM) was voted into the protocol in Q1, 2024, as specified by the XLS-30 standard.
The growth in the number of XRP locked in AMM pools to 10 million XRP reflects a robust engagement with the XRPL's infrastructure.
Total XRP pooled in XRPL AMM has crossed 10M XRP: https://t.co/RR0LsMcvEG pic.twitter.com/cb6CRZnNpx
— XRPScan (@xrpscan) June 24, 2024
As the total pooled XRP in the XRPL AMM increases, it could attract even more participants to XRP Ledger. Increased liquidity and user participation can lead to further innovations, new financial products and a more robust DeFi environment.
In related news, digital asset investment products experienced $584 million in outflows for the second week in a row, shaving off $1.2 billion. Bitcoin was the main focus, with $630 million in outflows.
In contrast, XRP saw $0.7 million in inflows, indicating that investors regarded the altcoin market's downturn as a buying opportunity.
At the time of writing, XRP was down 1.47% in the last 24 hours to $0.476, mirroring the general market downturn, partly triggered by macroeconomic uncertainty and fears of additional selling pressure in the wake of Mt. Gox's latest announcement.