Ripple’s Chief Technology Officer (CTO), David Schwartz, has given his opinion on whether or not the AMM (Automated Market Maker) functionality will affect THE XRP price. This comes following concerns by some members of the XRP community that the feature could cause XRP’s to drop significantly.  

AMM Feature Unlikely To Affect XRP Price

Schwartz mentioned in an X (formerly Twitter) post that he doesn’t think the AMM feature on the XRP Ledger will have so much impact on the XRP price. He went on to recognize how new strategies, such as “arbitraging against the DEX”, can affect a token’s price. However, he opined that this volatility harvesting strategy will not decrease XRP’s price volatility any time soon. 

He further explained that his assertion is because DEX trading activity on the Ripple Ledger represents only “a drop in the XRP trading ocean.” Schwartz’s argument is valid, considering that the DeFi landscape in the XRP ecosystem is just picking up and is still far behind Ethereum and Solana’s. 

Therefore, as Schwartz suggested, DEX trading volume on the XRP Ledger must significantly increase before it can play a crucial role in the XRP price discovery. The novel AMM feature, introduced as far back as September 2023, was expected to go live when the Rippled version 1.12 was released last year, but that didn’t happen. 

Back then, Schwartz Go to Source to See Full Article
Author: Scott Matherson

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