RLUSD AMM liquidity pool is a paired liquidity reserve on the XRP Ledger that holds equal-value RLUSD and XRP and issues pool tokens representing proportional claims. It automatically balances assets as XRP prices move, aiming to maximize the pool constant and provide earning via trading spreads.
AMM pools hold equal-value RLUSD and XRP and mint liquidity tokens.
Pools rebalance automatically when XRP price moves, converting between RLUSD and XRP.
Liquidity tokens rise from trading spreads; XLS-30D (March 2024) enabled AMM on XRPL and clawback enabled RLUSD trading (Jan 2025).
RLUSD AMM liquidity pool explained: Learn how XRPL AMM balances RLUSD and XRP automatically and how liquidity tokens earn via spreads — read more now.
What is the RLUSD AMM liquidity pool?
RLUSD AMM liquidity pool is an Automated Market Maker on the XRP Ledger that maintains a reserve of RLUSD and XRP of roughly equal value and issues tokens representing proportional shares of the pool. It automatically trades between assets to keep values balanced and capture spreads from swaps.
How does the XRP Ledger AMM work?
The XRP Ledger AMM replaces traditional order books with liquidity pools. Enabled via amendment XLS-30D in March 2024, the AMM holds asset pairs and uses an automated math function to rebalance holdings as market prices change.
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When XRP price falls, the pool converts RLUSD to XRP to restore parity; when XRP price rises, it converts XRP to RLUSD. Traders pay a spread on swaps, which accrues to liquidity token holders.
Liquidity tokens represent a proportional claim on the pool’s assets and track a pool constant: (amount of RLUSD × amount of XRP) ÷ tokens outstanding. The protocol aims to never reduce the pool constant and to grow it through trading fees and spreads.
Token value fluctuates with XRP volatility. According to Ripple CTO David Schwartz, these tokens may show smaller effective volatility than holding XRP alone because the pool balances exposure across both assets.
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Source: https://en.coinotag.com/ripple-cto-explains-how-xrp-rlusd-amm-liquidity-pools-on-xrpl-could-boost-liquidity-and-soften-xrp-volatility/