The XRP Ledger Foundation has issued proposals for a major upgrade to the XRP Ledger, according to an official announcement from the team.
The team has released a new draft standard that aims to expand XRPL DEX capabilities by upgrading its AMM v2, an Automated Market Maker (AMM) framework.
XRP Ledger prepares for major upgrade
While the XRP Ledger has continued to see increased adoption and user activity, the upgrade has been proposed to improve XRPL’s efficiency in liquidity and tokenization.
Per the new standard, the upgraded framework will allow liquidity pools on the XRP Ledger to support multiple pricing pool curves.
This way, they do not need to depend solely on the traditional constant product model currently used in XLS-30 AMMs.
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Notably, the upgrade will offer liquidity pool creators the opportunity to choose from different curve types depending on the market they are targeting.
The first part of the upgrade will see the network deploy three primary models, which include Constant Product pools similar to Uniswap v2, Concentrated Liquidity pools inspired by Uniswap v3, and StableSwap pools designed for stablecoin and foreign exchange markets.
XRPL to boost capital efficiency on its DEX
The details of the released standards further suggest that the upgrade will help to improve capital efficiency across the XRPL DEX.
As such, the XRP Ledger will be able to stabilize pricing for stablecoins, RWAs, and trading pairs like RLUSD and USDC on its network.
Following the upgrade, StableSwap pools will be able to provide smoother pricing and lower slippage across the liquidity range.
Moreover, Concentrated Liquidity pools would also allow liquidity providers to deploy capital only within selected price ranges instead of across the entire market range.
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