The XRP Ledger (XRPL) community has taken a significant step towards boosting the liquidity and utility of XRP and Ripple’s stablecoin, RLUSD. XPRL validators have approved the AMMClawback amendment, enabling the creation of automated market maker (AMM) pools for RLUSD.
AMMClawback amendment to boost XRP and RLUSD utility
The AMMClawback amendment, which has gained over 85% approval from XRPL validators at the time of writing, introduces two critical changes:
- Clawback-enabled tokens in AMMs: Tokens with a clawback feature, like RLUSD, can now interact with AMM pools. Previously, such tokens were excluded due to regulatory and technical restrictions.
- Enhanced deposit rules: Frozen tokens will no longer be eligible for AMM deposits, ensuring greater security and compliance.
Read also: Ripple to launch USD-backed stablecoin, RLUSD
The clawback feature, approved in February 2024, is vital for meeting regulatory standards, particularly for institutional players such as banks. It allows issuers to reclaim tokens under specific circumstances, such as fraud or criminal activity, aligning with compliance requirements.
Moreover, the amendment introduces a new transaction type, AMMClawback, which enables issuers to retrieve tokens from AMM pools. These changes will support the creation of AMM pools featuring RLUSD, XRP, and other tokens, further strengthening the XRPL ecosystem. Notably, it comes shortly after the base reserve requirement on the XRPL was reduced by 90%, from 10 to 1 XRP.
Read also: XRP Surge: 2,300+ whale transactions in 8 hours; 500K+ new wallets on XRP Ledger
Community and market implications
The amendment has received overwhelming support, securing 30 votes in favour against five opposed, achieving over 85% approval. This surpasses the required 80% threshold needed for the proposal to pass. If the Yes vote counts stand at current levels or increase in the next eight days, the amendment will officially take effect on 30 January 2025.
Once live, community members will be able to create AMM pools featuring XRP and RLUSD, Ripple’s stablecoin launched in December 2024. “It will allow the creation of the XRP/RLUSD Automated Market Maker Pool,” a top XRPL validator confirmed. While RLUSD has gained traction across several platforms, it is yet to be listed on major exchanges such as Binance and Coinbase.
Ripple’s CTO, David Schwartz, and other industry leaders view RLUSD’s integration into AMM pools as a significant development. Schwartz noted that these pools could dramatically enhance XRP liquidity and utility, especially if RLUSD gains broader adoption.
Panos Mekras, co-founder of Anodos Finance, expressed excitement about the upcoming XRP/RLUSD AMM pools. Mekras encouraged community members to prepare to provide liquidity and execute swapping on the Anodos Finance platform once the amendment is activated.
The integration of RLUSD into AMM pools is expected to bolster the XRPL ecosystem, offering users a new avenue to trade and provide liquidity. This positive development is in line with Ripple’s broader vision of fostering a more liquid and interoperable blockchain ecosystem. Recall that Ripple recently tapped the Chainlink standard to bring high-quality pricing data for RLUSD, potentially enhancing the stablecoin’s liquidity and adoption in decentralized finance (DeFi).
Read also: XRP Surge: 2,300+ whale transactions in 8 hours; 500K+ new wallets on XRP Ledger
Ndianabasi Tom A Petroleum Engineering degree holder, Ndianabasi’s interest since 2018 has been studying the ever-growing field of blockchain and cryptocurrency, keenly evaluating the innovation, exploration, and expansion of this field locally and globally. The founder of Nitadel a media platform, Ndianabasi has been a Writer at Crypto Asset Buyer (CAB) since 2021. When he is not drilling resources in the blockchain and cryptocurrency field, Ndianabasi is singing, reading, watching crime movies, or playing football.
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