David Schwartz emphasized that the XRPL’s Automated Market Maker (AMM) is currently experiencing limited profits due to the high trading fees on various blockchains.
The global XRP community will now have access to the XRPL’s AMM, allowing for seamless trading with improved liquidity.
The XRPL, supported by Ripple Labs, will be adopting an Automated Market Maker (AMM) similar to Uniswap for the Ethereum ecosystem and Pancakeswap for the Binance ecosystem. The implementation of the XRPL’s AMM took place on Friday, following a consensus among validators.
The implementation of the XRPL’s AMM has faced challenges, including technical and regulatory oversight. Ripple is also currently engaged in a legal battle to prevent XRP from being classified as a security.
Ripple CTO David Schwartz announced on Thursday that he had successfully implemented a trading bot that utilizes a similar algorithm to the XRPL’s AMM. The trading bot was able to work on centralized exchanges with different pairs, such as Solana and Ethereum, demonstrating the potential of the new AMM.
However, Schwartz pointed out that the trading bot is currently limited to a profit of approximately 11% per year due to high transaction fees on certain blockchains. The Solana network, in particular, has experienced a large number of unprocessed transactions due to the meme coin frenzy, which has put a strain on the network.
With the XRPL’s AMM catering to all digital assets, developers can now create similar trading bots to take advantage of the low transaction fees for XRP and other assets offered by different liquidity pools. Additionally, the increased cryptocurrency trading volume has led to higher overall volatility, which presents opportunities for greater profits.
Essentially, crypto trading bots benefit from executing numerous micro trades, minimizing the risk of holding onto a single trade for too long and missing out on other potentially profitable setups.
The launch of the XRPL’s AMM is expected to have a significant impact on the price of XRP. Traders, including bots, will now have direct access to deep liquidity. Coupled with the anticipated resolution of the SEC vs Ripple case, which is likely to result in a settlement due to the complexity of the case, XRP is poised for a substantial rally in the coming months.
Since February, XRP price has increased by about 20%, trading at around $0.629 on Friday, March 22, 2024. With a fully diluted valuation of approximately $62.9 billion, XRP is considered a large-cap altcoin.
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