Will This Ripple Update Increase XRP’s Price? CTO Chips In

Read full article at CryptoPotato.

Ripple is pushing a new upgrade to its XRP Ledger that will introduce a couple of very important features. In fact, the company’s CTO has, on multiple occasions, expressed his excitement over the upgrade and said that he’s very much looking forward to it.

But this has also sparked a discussion on the impact of the implementation on XRP’s price. Let’s dive in.

What’s The Fuss All About?

As CryptoPotato reported, Ripple is about to implement an upgrade to its XRP Ledger that will see the integration of two very important features: an automated market maker and a clawback feature. The first one is of interest for this story.

The automated market maker (AMM) will be non-custodial and should be integrated as a native featured to the DEX “in a way that provides increased returns to those who provide liquidity for the AMM and minimizes the risk of losses due to volatility.”

Per the technical specifications of the upgrade:

XLS-30 will bring a native Automated Market Maker to the XRPL that integrates with the existing order book DEX to enable trading of digital assets in automated liquidity pools and enable developers to address a wider audience of DeFi stakeholders. – reads the announcement.

What About XRP’s Price?

One user asked David Schwartz – the CTO of Ripple – whether this could influence Ripple’s price.

When AMM goes live, and a bunch of XRP holders start putting their XRP into pools, and since a lot of us only hold XRP… won’t the price of XRP tank since the AMM will be selling a bunch of XRP to balance the pools out?

To this, Schwartz said:

It’s true that if the AMM draws mainly from XRP holders, it will be a short-term net increase in selling pressure. I doubt that will be significant and might be even be outweighed by people going in the other direction.

The CTO also said that, in theory, the AMM should reduce the volatility by selling during price increases and buying during price decreases, essentially turning volatility “into yield.”

The post Will This Ripple Update Increase XRP’s Price? CTO Chips In appeared first on CryptoPotato.

This article is strictly for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. CryptosOnline.com does not provide investment, tax, legal, business or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any loss or damage caused or alleged to be caused by, or in connection with, the use of or reliance on any content, goods, services or opinions mentioned in this article.

#Bitcoin #Crypto #Cryptocurrency

Related articles

First Ever Court Hearing Inside Metaverse

Read full article at Coingape. This article is strictly for informational purposes only. It is not a direct […]

Learn More

FinCEN lists cryptocurrencies as top AML and CFT priorities

Read full article at Cointelegraph.com News. FinCEN will soon issue regulations on how financial institutions should incorporate its […]

Learn More

Banks Not Looking to Create Own DeFi Alternatives – Investment Banker

Read full article at Crypto News.Olsen of JPMorgan’s blockchain arm Onyx, said that finding the “right intersection between […]

Learn More