The post Ripple CTO on How XRP, RLUSD Drive Liquidity on AMM: Details appeared on BitcoinEthereumNews.com. In recent replies on social media X, Ripple CTO David Schwartz explains AMM liquidity pools in relation to the Ripple USD (RLUSD) stablecoin. This was in response to an X user who had sought clarification as regards the subject matter. The pool holds half RLUSD and half XRP. The assumption of the pool is that LP token holders want to be long XRP and to profit from XRP volatility. — David ‘JoelKatz’ Schwartz (@JoelKatz) August 30, 2025 Automated Market Maker (AMM) on XRP Ledger uses liquidity pools instead of traditional order books to facilitate trades. The AMM functionality was enabled with the amendment XLS-30D in March 2024. You Might Also Like The clawback amendment, which went live in January this year, enabled Ripple’s RLUSD stablecoin to be floated and traded directly on XRP Ledger’s DEX, boosting its liquidity and trading options and increasing decentralized finance (DeFi) activity on the XRPL network. RLUSD AMM liquidity pool explained According to Schwartz, the AMM liquidity pool holds a pile of RLUSD and XRP, each of roughly equal value. It also issues tokens that represent claims against the pool for a proportional share of its assets. You Might Also Like When the price of XRP goes down, the pool converts RLUSD to XRP to equalize the values; on the other hand, when XRP price goes up, the pool converts XRP to RLUSD for value equalization. The aim is to always increase the value of the pool constant (the amount of RLUSD times the amount of XRP divided by the number of issued tokens outstanding) and never to allow it to decrease. According to the Ripple CTO, the idea behind the AMM liquidity pool is that, regardless of whether XRP’s price takes a round trip, the value of each liquidity token would serve to maximize… The post Ripple CTO on How XRP, RLUSD Drive Liquidity on AMM: Details appeared on BitcoinEthereumNews.com. In recent replies on social media X, Ripple CTO David Schwartz explains AMM liquidity pools in relation to the Ripple USD (RLUSD) stablecoin. This was in response to an X user who had sought clarification as regards the subject matter. The pool holds half RLUSD and half XRP. The assumption of the pool is that LP token holders want to be long XRP and to profit from XRP volatility. — David ‘JoelKatz’ Schwartz (@JoelKatz) August 30, 2025 Automated Market Maker (AMM) on XRP Ledger uses liquidity pools instead of traditional order books to facilitate trades. The AMM functionality was enabled with the amendment XLS-30D in March 2024. You Might Also Like The clawback amendment, which went live in January this year, enabled Ripple’s RLUSD stablecoin to be floated and traded directly on XRP Ledger’s DEX, boosting its liquidity and trading options and increasing decentralized finance (DeFi) activity on the XRPL network. RLUSD AMM liquidity pool explained According to Schwartz, the AMM liquidity pool holds a pile of RLUSD and XRP, each of roughly equal value. It also issues tokens that represent claims against the pool for a proportional share of its assets. You Might Also Like When the price of XRP goes down, the pool converts RLUSD to XRP to equalize the values; on the other hand, when XRP price goes up, the pool converts XRP to RLUSD for value equalization. The aim is to always increase the value of the pool constant (the amount of RLUSD times the amount of XRP divided by the number of issued tokens outstanding) and never to allow it to decrease. According to the Ripple CTO, the idea behind the AMM liquidity pool is that, regardless of whether XRP’s price takes a round trip, the value of each liquidity token would serve to maximize…