Ripple CTO David Schwartz proudly announced on the Twitter/X social network that the XLS-30 AMM (automated market maker) that Ripple has been working on has finally launched on the XRP Ledger mainnet.
Ripple CTO David Schwartz proudly announced on the Twitter/X social network that the XLS-30 AMM (automated market maker) that Ripple has been working on has finally launched on the XRP Ledger mainnet.
He also warned users to be careful when starting trading through AMM and shared necessary guidance.
Words about AMM on XRP Ledger
In a recent blog post, RippleX developers revealed the launch of the non-custodial XLS-30 AMM on XRP Ledger, and boasted that from now on the liquidity and trading paradigm on the network will undergo a dramatic change.
The AMM was created for the XRPL DEX (decentralized exchange) and the new integration will enable returns for those who add liquidity to the AMM. The automatic market maker also provides decreased slippage when traders work with the long tail of tokens. Developers will be able to use XLS-30 to integrate with AMM and create their own interfaces for trading and liquidity provision.
Ripple CTO Warning to Traders
David Schwartz warned traders who intend to use an AMM on the DEX. He said that if they make a unilateral deposit into an AMM that has lower liquidity than the deposit itself, these traders will suffer a loss in the deposit process. He also warned that if traders see a large amount of slippage in the deposit, they should consider using other options besides unilateral deposit.
Another warning made by Ripple’s CTO says that a trader may also suffer a loss if their deposit is made into an AMM that was largely unbalanced before making the deposit. However, Schwartz noted that this should be a rare case, since if an MMA remains unbalanced for a long time, it means that everyone is missing out on the opportunity to make profits.
In general, according to Schwartz, the safest option is to deposit equal values of both assets traded by the AMM. If traders decide to use unilateral deposits after all, the AMMs they use should be “reasonably liquid.” The risk of these losses should decrease, the CTO added, as AMM pools expand and more arbitrageurs begin to trade against the pools.
