Ripple Labs’ XRP Ledger AMM protocol has printed a massive surge in overall transaction volume.
XRP Ledger (XRPL) Automated Market Marker (AMM) experienced a significant surge recently, surprising the crypto ecosystem. Compared to the value recorded a few weeks ago, the daily transaction volumes saw a 40% spike. This sudden surge is linked to a significant increase in activity. Some experts have attributed this to new liquidity and trading opportunities introduced by the AMM feature on XRPL.
Why Is the XRP Ledger AMM Surging?
Blockchain Backer, an influential crypto analyst in the cryptocurrency community, highlighted this trend while acknowledging the sharp spike in AMM volume. It is worth noting that this AMM came to life as part of Ripple’s XRPL. Its design allows it to enable decentralized, permissionless trading, allowing users to provide liquidity for various assets on the network.
#XRP AMM volume explosion.
Daily volumes are 40X what they were a week ago.
Chart from @xpmarket. pic.twitter.com/NR1NThSaNX
— Blockchain Backer (@BCBacker) October 27, 2024
So far, this functionality has been instrumental to attracting substantial interest from both retail and institutional users. Prior to the launch of the AMM, Ripple Labs’ Chief Technology Officer (CTO) David Schwartz expressed his excitement towards the protocol. In a matter of months following the launch, the XRPL has recorded a marked uptick in AMM-related transactions and overall DEX activity.
According to a report from blockchain analytics platform CryptoQuant, XRPL’s DEX volume has surged by approximately 17.6% in the last month. Markedly, this further reflects the heightened user engagement across XRPL. Similarly, XRPL registered a 62.35% increase in AMM Deposit activity. AMMCreate spiked by 143.10% and this underscores the notable rise in liquidity contributions from users.
Additionally, governance engagement has seen a spike, with AMMVote activity up by 65.22%. Generally, this trend of increase in AMM volume is a reflection of broader patterns within the XRPL ecosystem. This comes at a time when more users and liquidity providers are interacting with the new tools offered by Ripple’s blockchain.
It is worth noting that this sentiment emerges as total transaction volume and payments are experiencing steep declines. Despite this situation, crucial growth factors remain up. Considerably, this suggests that there is a shift in how users interact with the platform. It is favoring decentralized trading and liquidity pools over traditional payments.
Alongside the liquidity and trading opportunities highlighted by experts and market observers, this surge in volume could be a result of other factors. It may be linked to XRPL AMM’s ability to accommodate various trading strategies and incentivize liquidity provision through high-yield-earning opportunities.
This is of immense value to those seeking decentralized alternatives to centralized exchanges.
Ripple Prepares for RLUSD Launch
Apart from the XRPL AMM, Ripple has other projects it is currently working on.
There is the upcoming RLUSD stablecoin, which has been in the private beta testing phase for the last two months. So far, the potential stablecoin has seen several mints and burns. These moves suggest that the San Francisco-based blockchain firm is gradually nearing the stablecoin launch.
The recent development with the AMM signals that Ripple is on the right track.
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