XRPL Enhances AMM Pools with AMMClawback—A Big Step for DeFi

• The XRP Ledger has implemented the AMMClawback amendment, an update aimed at strengthening the regulatory compliance of its AMM pools, according to information shared by XRP Scan on X.
• The RLUSD/XRP AMM pool, among the RLUSD-paired pools, attracted more than $423,000 in total value locked within hours of going live.

XRPScan, the leading blockchain explorer for the XRP Ledger (XRPL), has confirmed that the network has successfully implemented the Automated Market Maker Clawback amendment. Announced on an X post, this upgrade introduces new regulatory-focused rules governing liquidity pools, particularly for tokens requiring enhanced compliance. 

The AMMClawback amendment received a significant 91.43% approval, with 28 out of 35 validators voting in favor, further demonstrating the community’s backing for improved regulatory mechanisms. According to XRPScan, the estimated activation time (ETA) for the update was 7:37 p.m. UTC.

What Does the AMMClawback Amendment Do?

The implementation of amendment XLS-73d brings the AMMClawback feature to the XRP Ledger, enhancing compliance by allowing token issuers to reclaim assets within AMM pools while ensuring liquidity and seamless trading. Alongside this update, Credentials have been introduced as a new set of tools for managing authorization and compliance requirements.

This feature includes three transaction types: CredentialCreate, which enables users to issue credentials on the ledger; CredentialAccept, allowing recipients to verify and accept credentials; and CredentialDelete, which provides the option to remove credentials when they are no longer needed.

Additionally, the amendment integrates XLS-30, which is an Automated Market Maker functionality, into the XRP Ledger. With this, each asset pair can have a single AMM in the ledger, where users can contribute liquidity in exchange for a proportional share of earnings and associated risks. The update also enforces deposit rules, if one of the paired tokens is frozen, wallets are restricted from depositing single-sided or double-sided assets into an AMM pool. Furthermore, unauthorized accounts may only deposit once if the paired asset is permitted.

Details of the amendment suggest that issuers gain the ability to freeze or reclaim tokens within AMM pools while ensuring unauthorized wallets cannot deposit paired assets. Any clawback action must now be executed through the designated AMMClawback function rather than standard clawback transactions. Decentralized Identifier (DID) functionality is also added to the ledger, aligning with World Wide Web Consortium (W3C) standards. DIDs enable digital identities that are self-controlled by the subject rather than relying on a centralized authority.

The activation of AMMClawback is expected to lead to the creation of an XRP/RLUSD AMM pool, improving liquidity for both tokens. Earlier, RLUSD was restricted from participating in AMM pools due to its built-in clawback function.

Ripple CTO David Schwartz took to X to share his excitement about the successful implementation of the AMMClawback feature. Notably, Schwartz has long advocated for RLUSD’s potential to enhance XRP liquidity, suggesting that the stablecoin’s integration into AMM pools could play a crucial role in strengthening the XRP ecosystem.

As trading activity surged, the liquidity of the XRP/RLUSD AMM pool grew rapidly. According to data from XPMarket, an XRPL analytics platform, the TVL nearly doubled to $423,000 within hours, highlighting the pool’s strong momentum. Currently, XRP is trading at $3.06, reflecting a 1% decrease in the past day and 3.35% in the past week.

Recommended for you: