What to know:
- The XRP Ledger AMM v2 draft adds StableSwap and concentrated liquidity curve designs.
- New curve options target better liquidity for stablecoins, FX markets, and RWA markets.
- Existing AMM pools stay on CurveType 0, while new pools may use supported curves later.
The XRP Ledger Foundation has published a draft AMM v2 standard for the XRPL decentralized exchange. The proposal adds StableSwap and Concentrated Liquidity curves. It targets better capital use and pricing for stablecoins, FX markets, real-world assets, and tokenized markets.
The draft can be seen in XRPL Standards discussion #547 titled “AMM Swappable Curves.” It opened on May 26 and is still listed as a draft amendment proposal. Denis Angell and Roman Thpt are listed as authors.
The proposal calls for XLS-30 as a dependency. XLS-30 is the AMM that already exists on the XRP Ledger. The new draft would take the design further and allow different types of curves to be created when new AMM pools are set up.
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XRP Ledger AMM v2 Would Add Flexible Pool Curves
The existing XRP Ledger AMM is a constant product model. According to the XRPL documentation, this design is a geometric mean AMM with a weight of 0.5. It is a similar structure used by early decentralized exchanges.
There are many volatile pairs that can use the constant-product model. On the other hand, it distributes liquidity widely throughout the price spectrum. That can restrict efficiency when the majority of trading occurs near a small market price.
The AMM v2 draft would introduce the ability for the pool creator to choose the curve type when the pool is created. The chosen curve would form the key of the AMM pool. With that change, it would be possible to have several pools of the same asset pair with different curve models.
One of the proposed curve types is concentrated liquidity. It allows liquidity providers to deposit funds within specific price ranges. This can increase the market depth around trading areas and decrease the idle liquidity outside of the trading zones.
The second curve type mentioned in the draft is called StableSwap. It is for assets that are likely to be valued at around the same price. Some tokenized real-world assets, stablecoin pairs, and FX-linked tokens can be traded at these markets.
AMM v2 Draft Links XRPL DEX to Tokenized Asset Growth
The XRP Ledger Foundation linked the draft with stablecoins, FX markets, RWAs, and XRPL DEX liquidity. These markets require minimal slippage at parity. They may not require the same wide-ranging volatility protection that is applied to crypto pairs.
Current AMM pools would remain as CurveType 0. This implies that existing pools would retain the constant-product model. If the proposal is accepted, new pools may opt for another supported curve type.
The move follows XRPL’s ongoing priorities of institutional DeFi and the infrastructure for tokenized assets and the broader ecosystem. Ripple has earlier pointed out XRPL AMM tools and AMM Clawback for regulated token utilization. RLUSD has also been featured in the broader infrastructure conversation.
AMM v2 would not launch new assets or markets by itself. It would, rather, provide developers with more liquidity options. However, the standard remains to be part of the XRPL amendment process before it becomes a live network feature.
The draft is not activated, so network behavior has remained the same. In order to make any live deployment, validators would have to pass an amendment. Until then, the proposal is still an ongoing standards discussion among XRPL developers and contributors.
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