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The XRP Ledger’s decentralized exchange is getting a significant upgrade proposal. The XRPL Foundation published a draft standard for what it calls “AMM Swappable Curves” on May 26, essentially blueprinting an AMM v2 that bolts StableSwap and Concentrated Liquidity pools onto the existing infrastructure.
What AMM v2 actually changes
The original AMM on XRPL, established through the XLS-30 amendment that went live on March 22, 2024, uses a constant product model. That’s the classic x*y=k formula that Uniswap V1 popularized years ago. Liquidity gets spread evenly across all possible prices, which means most of it sits idle at price points that never get traded.
AMM v2 doesn’t rip that out. The existing constant product pools stay exactly where they are, no migration required.
Instead, the proposal introduces pluggable curve types. Two are specified in the draft: StableSwap and Concentrated Liquidity.
StableSwap curves are purpose-built for assets that trade near a 1:1 ratio, like stablecoin pairs or tokenized fiat currencies. Instead of a smooth hyperbolic curve, StableSwap flattens the pricing function around the peg, allowing much larger trades with minimal price impact.
Concentrated Liquidity lets providers deposit funds within specific price ranges rather than across the entire spectrum. For stable pairs, this can deliver up to thousands of times better capital efficiency compared to the constant product model.
Why this matters for XRPL’s DeFi ambitions
The ledger currently hosts over $3 billion in tokenized real-world assets. A tokenized US Treasury or foreign exchange pair doesn’t benefit much from a constant product AMM. These assets trade in tight ranges with thin margins. Without StableSwap or concentrated liquidity mechanics, the trading experience is worse than what traditional finance offers.
The draft also plans a “Smart AMM” curve type for subsequent development, which would introduce programmability to the AMM framework at the protocol level.
Recent collaborative efforts between Ripple and JPMorgan have underscored the institutional interest in more efficient yield generation and trading on XRPL.
The path from draft to reality
The XRPL operates on a validator consensus model, and any new amendment requires a supermajority vote from validators before activation. At the time of the announcement, XRP was trading around $1.33 to $1.34.
There’s also the competitive angle. Uniswap V3 pioneered concentrated liquidity on Ethereum back in 2021. Trader Joe brought it to Avalanche. Orca runs it on Solana. XRPL’s implementation approach is fundamentally different, being baked into the ledger itself rather than running as a smart contract on top of a general-purpose chain. XRPL settles transactions in three to five seconds with negligible fees.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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