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Ripple's Chief Technology Officer David Schwartz has proudly announced on the Twitter/X social media network that the XLS-30 AMM (automated market maker) that Ripple has been working on has been finally launched on the XRP Ledger mainnet.
He has also warned users to be careful when beginning trading via the AMM, sharing the necessary guidance.
Word about AMM on XRP Ledger
In a recent blog article, RippleX devs have revealed the rollout of the non-custodial XLS-30 AMM into XRP Ledger, boasting that from now on the liquidity and trading paradigm on the network will undertake a dramatic change.
The AMM was built for the XRPL DEX (decentralized exchange), and the new integration will allow making returns for those who add liquidity to the AMM. The automatic market maker also provides a decrease in slippage when traders work with the long tail of tokens. Developers will be able to use XLS-30 to integrate with the AMM and make their own interfaces for trading and liquidity provision.
Ripple CTO's warning to traders
David Schwartz issued a word of caution to traders who intend to use an AMM on the DEX. He stated that should they make a single-sided deposit into an AMM that has lower liquidity than the deposit itself, then these traders will take a loss in the deposit process. He also warned that should traders see a large amount of slippage on the deposit, they should consider using other options than a single-sided deposit.
Another warning made by the Ripple CTO says that a trader may also suffer a loss if their deposit is made into an AMM that was largely out of balance before the deposit was made. However, Schwartz pointed out that this should be a rare case since if an AMM stays out of balance for a long time, this means that everyone is missing an opportunity to make a profit.
Overall, according to Schwartz, the safest option is to deposit equal values of both assets traded by the AMM. If traders decide to use single-sided deposits after all, the AMMs they use should be “reasonably liquid.” The risk of these losses should decline, the CTO added, as AMM pools expand and more arbitrageurs begin to trade against the pools.
Valeria Blokhina
Vladislav Sopov
Gamza Khanzadaev
