One of the $XRP Ledger’s biggest weaknesses as a DeFi venue may be on their way out.
A draft amendment entitled “AMM Swappable Curves” was submitted to the XRPL standards repository on Tuesday, proposing to expand the network’s existing automated market maker to include 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 take place against a pool of deposited tokens rather than between buyers and sellers.
The proposal was written by XRL core developers Denis Angell and Roman Thpt and requires a separate amendment vote before activation. For now it is still a concept.
What it would do is let liquidity providers on the XRPL choose how their pool prices assets. The current setup spreads liquidity uniformly across every possible price, which is fine for volatile pairs, but burns capital for stablecoin pairs and correlated assets.
Concentrated liquidity allows liquidity providers (or users who supply their tokens to a protocol in exchange for capturing a portion of the fees) to focus on a narrow band where most transactions actually occur, providing much more usable depth per dollar deposited. StableSwap is built for assets that are traded on a near 1:1 basis, such as dollar-pegged stablecoins or packaged representations of the same asset.
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But moving institutional capital up the chain is one part of any financial strategy. Getting that capital to yield returns, lend, or trade efficiently against other tokenized assets requires DeFi rails that actually work for the job.
Concentrated liquidity in particular has become the standard for capital-efficient AMMs in the major DeFi ecosystems, with around 60% of AMM volume now flowing through some version of it, according to the proposal’s own data quotes. XRPL’s current AMM lacks that since its launch in 2024.
The amendment also leaves existing swimming pools untouched. Pools created before the new curves were activated will remain on the constant product model without the need for migration. Pool makers choosing from the new menu would do so at the time of pool creation, establishing the pool life curve type.
$XRP trading at $1.34 in the US on Tuesday morning. Whether the AMM upgrade arrives in time to strengthen the institutional narrative depends on the change process, which could take months and is not guaranteed to succeed.