The proposal, named "Interchangeable AMM Curves," aims to expand the current AMM design of the ledger by adding new pool curve options. These options include constant product, concentrated liquidity, and StableSwap. The programmable smart AMM model will follow separate specifications.
Since the XLS-30 amendment came into effect in March 2024, XRPL has supported native decentralized exchanges and AMMs. However, the current AMM design disperses liquidity across all possible prices, which may limit capital efficiency for stablecoin pairs, tokenized assets, and other markets that typically trade within a narrow range.
Today, we are releasing a new XRP Ledger standard for AMM v2.
The new pool curves, StableSwap and concentrated liquidity, enhance capital efficiency and stabilize pricing for stablecoins, forex markets, and real assets on the XRPL DEX.
The new draft will allow pool creators to choose the pricing curve that suits each asset pair. Existing pools will continue to use the current constant product model without mandatory migration. New pools will select their curve type upon creation, and this choice will remain locked for the entire lifecycle of the pool.
For volatile asset pairs, the current constant product model can still play a clear role. However, the DeFi News market on XRPL has long lacked many tools already utilized by other ecosystems to improve pricing, reduce slippage, and make liquidity more practical.
The goal of XRPL AMM v2 is stablecoins and tokenized assets.
With concentrated liquidity, liquidity providers (LPs) gain greater control as they no longer need to provide liquidity across all price levels. They can focus on the narrow range where most trading occurs. This structure can increase available liquidity without requiring the same amount of capital.
The AMM proposal still needs to go through XRPL's amendment process. Validators must approve the changes before activation, and this process may take several months. Approval at the draft stage does not guarantee final acceptance.