The XRP Ledger Foundation has unveiled a draft proposal aimed at transforming how liquidity and trading function on XRP’s decentralized exchange. This upgrade, known as AMM Swappable Curves, would enable liquidity providers to select among various pricing models when creating liquidity pools, diverging from the current single-curve approach.
Since March 2024, the XRP Ledger’s Automated Market Maker (AMM) system has relied exclusively on a “constant product” model to set prices within liquidity pools. While this model suits volatile cryptocurrencies well, it proves less efficient for assets such as stablecoins and tokenized real-world assets (RWAs), which experience minimal price fluctuations. The new proposal introduces two additional curve models—StableSwap and concentrated liquidity—to better handle these asset types.
StableSwap is optimized for assets that maintain close value alignment, like USDT, USDC, and fiat-backed tokenized RWAs. It aims to reduce price slippage and improve capital efficiency by enabling tighter pricing during trades. Concentrated liquidity, common in other DeFi ecosystems, allows providers to allocate liquidity within targeted price ranges, potentially boosting returns and market precision.
At the core of this upgrade is a pluggable curve architecture, which would allow multiple pricing formulas to coexist on the XRP Ledger. This flexibility means that market creators can match the pricing model to the asset class—volatile tokens would use the constant product curve, whereas stablecoins and RWAs could leverage StableSwap for tighter spreads and better trade execution.
The proposal was drafted by XRP core developers Denis Angell and Roman Thpt and remains under review by XRP Ledger validators. If approved, it would enhance the existing XLS-30 AMM spec, extending functionality without disrupting active liquidity pools. This ensures a smooth transition while introducing more sophisticated trading options for Ledger users and investors.
By accommodating asset-specific pricing models, the upgrade addresses a key limitation of the current system, which applies a one-size-fits-all formula across diverse asset pairs. This has often led to inefficiencies, particularly for stablecoins whose price stability clashes with volatile token market dynamics. The flexible AMM design could therefore attract greater liquidity and more varied asset classes, reinforcing XRP Ledger’s position in decentralized finance markets.