The XRP Ledger Foundation has introduced a draft proposal called 'AMM Swappable Curves' that would add new pricing models to the ledger's decentralized exchange. The upgrade would let liquidity pool creators choose between StableSwap and concentrated liquidity in addition to the current constant product model. The idea is to make trading more capital-efficient and reduce slippage, especially for stablecoins and tokenized real-world assets.
Why the AMM upgrade is needed
The existing XRPL Automated Market Maker, known as XLS-30, launched on mainnet in March 2024 and only supports the constant product model. That works fine for volatile pairs but isn't ideal for assets that should trade near a fixed price, like USDT or USDC. The new models aim to provide tighter pricing and lower slippage for stablecoins, tokenized real-world assets, foreign exchange, and general DeFi trading.
Core developers Denis Angell and Roman Thpt filed the upgrade proposal. It's still in draft stage and needs approval from XRPL validators before it can take effect.
How the pluggable curve architecture works
The proposal introduces what the foundation calls a 'pluggable curve architecture.' That means the AMM can support multiple trading models at the same time. Different asset pairs could use different models. For example, a volatile pair like XRP/BTC could keep the constant product curve, while a stablecoin pair like USDT/USDC could switch to StableSwap for tighter spreads.
If approved, the amendment would extend XLS-30 without replacing or disrupting existing liquidity pools. Existing pools would keep running as they are. Creators of new pools would get the option to pick a different curve.
What StableSwap and concentrated liquidity bring
StableSwap is designed for assets that are expected to trade near a 1:1 ratio, like stablecoins and tokenized real-world assets tied to fiat currencies. It offers more accurate pricing and less slippage in those pairs. Concentrated liquidity, a model popularized by Uniswap v3, lets liquidity providers allocate capital within a specific price range, making their capital more efficient.
The combination of these models under a single AMM framework is meant to make the XRPL DEX more competitive for institutional and retail users who trade stable-value assets.
Next steps: validator vote
The 'AMM Swappable Curves' proposal is open for community discussion. The next concrete step is a vote by XRPL validators. If they greenlight the amendment, it would become part of the live network. No timeline for that vote has been set yet.
