One of the XRP Ledger’s biggest weaknesses as a DeFi venue may be on its way out.
A draft amendment titled “AMM Swappable Curves” was filed on the XRPL standards repository on Tuesday, proposing to expand the network’s existing automated market maker with three pluggable curve types – constant product, concentrated liquidity and StableSwap.
A fourth fully programmable curve type called Smart AMM is reserved for a follow-up specification. AMMs refer to automated market makers, a type of decentralized exchange where trades are made against a pool of escrow tokens rather than between buyers and sellers.
The proposal was authored by XRL core developers Denis Angell and Roman Thpt and would require a separate amendment vote before activation. So far, it is still in draft.
What it would do is let liquidity providers on XRPL choose how their pool prices assets. The current setup spreads liquidity evenly across all possible prices, which is fine for volatile pairs, but burns capital for stablecoin pairs and correlated assets.
Concentrated liquidity lets liquidity providers (or users who supply their tokens to a protocol in exchange for taking a share of the fees) target a narrow band where most trades actually take place, providing far more usable depth per transaction. inserted dollar. StableSwap is built for assets that trade close to 1:1, such as dollar-pegged stablecoins or wrapped representations of the same asset.
XRPL has been quietly building institutional tokenization volume – over $3 billion in tokenized real-world assets currently sit on-chain, including a Ripple-JPMorgan pilot earlier this month that processed a tokenized US Treasury redemption in under five seconds.
But moving institutional capital up the chain is one leg of any financial strategy. Allowing this capital to earn returns, be loaned against, or trade effectively against other tokenized assets requires DeFi rails that actually work for the task.
In particular, concentrated liquidity has become the standard for capital-efficient AMMs across major DeFi ecosystems, with around 60% of AMM volume now flowing through some version of it, according to the proposal’s own data citations. XRPL’s current AMM has lacked it since its launch in 2024.
The change also keeps existing pools untouched. Pools created before the new curves are activated will remain on the constant product model without the need for migration. Pool creators choosing from the new menu would do so at creation time, with the curve type locked for the life of the pool.
XRP is trading at $1.34 in US morning hours on Tuesday. Whether the AMM upgrade lands in time to reinforce the institutional narrative depends on the change process, which could span several months and is not guaranteed to pass.
