DeFi
XRP Just Reached a Major Defi Milestone: Details
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XRP, the seventh largest cryptocurrency, recently achieved a major milestone in the decentralized finance (DeFi) market. According to XRPscan, a leading XRP Ledger explorer, the total amount of XRP pooled in the XRPL Automated Market Maker (AMM) has exceeded 10 million XRP. This milestone highlights the growing adoption and usage of XRP in DeFi.
Automated market makers (AMM) are a type of decentralized exchange mechanism that uses liquidity pools to price assets algorithmically rather than creating bids according to predefined specifications. Liquidity pools allow holders to earn a portion of trading fees by offering their tokens as liquidity.
In the case of XRP Ledger, an integrated central limit order book (CLOB) manages all XRPL transactions for fungible tokens. This CLOB has been part of XRPL since its inception and offers the benefits of fewer trust assumptions and centralized liquidity, as opposed to the inherent vulnerabilities of smart contracts.
In addition to the existing CLOB, an Automated Market Maker (AMM) was voted into the protocol in Q1 2024, as specified by XLS-30.
The growth in the number of XRP locked in AMM pools to 10 million XRP reflects strong engagement with the XRPL infrastructure.
Like the total XRP pooled with the increase in XRPL AMM, this could attract even more participants to XRP Ledger. Increased liquidity and user participation can lead to new innovations, new financial products, and a more robust DeFi environment.
On a related note, digital asset investment products saw outflows of $584 million for the second week in a row, a reduction of $1.2 billion. Bitcoin was the center of attention, with $630 million in outflows.
In contrast, XRP saw $0.7 million in inflows, indicating that investors viewed the altcoin market slowdown as a buying opportunity.
At the time of writing, XRP was down 1.47% over the past 24 hours to $0.476, reflecting the general market slowdown triggered in part by macroeconomic uncertainty and fears of a additional selling pressure following the latest Mt. Gox announcement.
About the Author
Tomiwabold Olajide
Tomiwabold is an experienced cryptocurrency analyst and technical analyst. It pays special attention to cryptocurrency research, conducting comprehensive price analysis and trading forecasts on estimated market trends. Tomiwabold graduated from the University of Lagos.