Ripple Labs has announced plans to integrate automated market makers (AMM) into the XRP ledger. The decision has left the XRP community uneasy, as they mull over the potential long-term effects of AMMs on the price of XRP.
AMMs will be integrated into the XRP ledger
Ripple, a global payment network provider, said its intentions to incorporate marketing authorizations in the XRP Ledger to help improve liquidity. The introduction of MAs into the XRP Ledger should further develop the Ripple Ecosystem providing improved business efficiency and liquidity. The initiative also aligns with Ripple’s efforts to continue to optimize and innovate its blockchain infrastructure and network.
Although this announcement was greeted with skepticism by the XRP community and the broader crypto space, Ripple has stated its desire to move forward with its plans, looking at the bigger picture and the potential success of AMMs in the ecosystem.
Many members of the crypto community have expressed concerns about the impacts of AMMs embedded in XRPL. Some members believe that the price of XRP could be affected and cause the stability of the token. Other members welcomed this announcement with enthusiasm, anticipating the positive effects the initiative would have on the Ripple ecosystem.
A member of the XRP community and co-founder of Anodos Finance, Panos addressed concerns about the potential effect of AMMs on The price of XRP. He said AMMs could increase the buying pressure and liquidity of XRP while improving its efficiency and adoption.
“XRPL AMM will potentially add buying pressure on XRP as a significant number are expected to be locked on AMM, which will also increase the liquidity of ‘use,’ Panos said.
Bulls struggle to maintain control of price | Source: XRPUSD on Tradingview.com
Community probes impact of AMMs on XRP price
Following the announcement of AMMs introduced in the XRP Ledgeran X influencer (formerly Twitter), Digital Perspectives PermaBull has sparked a series of heated discussions within the XRP community regarding the effects of an AMM on The value of XRP.
Influencer X asked a series of controversial questions to the crypto community. One of the questions was whether the introduction of AMMs and regulations established by the Bank for International Settlements (BIS) would ultimately transform XRP to stablecoin in the future.
“Are we looking at XRP becoming a Stablecoin with the introduction of AMMs and BIS prudential treatment requirements?” the influencer declared.
He added: “XLS-30D succeeds and AMMs become part of XRPL, will this change the characteristics of XRP and will it be considered a group 1b asset for BIS and other banks?
In response to growing concerns, XRPL advocate Panos reassured community members who had started to worry about the potential impacts of AMMs on XRP. Panos claimed that the fundamental characteristics of XRP would never change even with the inclusion of an AMM.
“The characteristics of XRP can NEVER change. It will always remain the native coin of the XRP Ledger, a decentralized digital asset that anyone can trade freely. XRP can never become a stablecoin for this reason, it is technically impossible and makes no sense,” Panos said.
Featured image from CoinGape, chart from Tradingview.com