Ripple CTO Explains RLUSD-XRP AMM Pools May Enhance XRPL DeFi Liquidity and Stability

• AMM pools replace order books with pooled liquidity for continuous trading.

• Liquidity providers receive pool tokens representing a proportional claim on combined RLUSD and XRP.

• The RLUSD stablecoin integration (clawback amendment, Jan 2025) increased on-ledger trading and XRPL DeFi participation.

RLUSD XRP AMM pools explained: Learn how RLUSD and XRP liquidity pools rebalance and create DeFi liquidity on XRPL — read how to add liquidity today.

Ripple CTO David Schwartz explains RLUSD-XRP AMM pool mechanics, highlighting stablecoin’s role in boosting XRPL DeFi and liquidity growth.

• RLUSD and XRP liquidity pools help equalize token values automatically, supporting stable and continuous trading without traditional order books.
• AMM token holders gain proportional value in the pool, balancing exposure to both assets while profiting from trade activity and volatility.
• The RLUSD stablecoin’s integration into XRPL’s DEX has boosted DeFi engagement and broadened liquidity access across the ecosystem.

Ripple CTO David Schwartz explained how automated market maker (AMM) liquidity pools work with the RLUSD stablecoin on the XRP Ledger in a response to user queries on the platform X. His explanation followed a clear uptick in RLUSD usage for decentralized trading on the XRPL.

What is the RLUSD-XRP AMM liquidity pool mechanism?

RLUSD-XRP AMM pools on the XRPL are smart contract-like liquidity pools that pair RLUSD and XRP in equal value, allowing trading via a constant-product mechanism. Liquidity providers deposit equal-value assets, receive pool tokens, and earn fees as the pool rebalances to maintain parity during price moves.

How did XRPL amendments enable AMM trading with RLUSD?

The XLS-30D amendment (March 2024) added AMM support to the XRPL, enabling on-ledger liquidity pools. RLUSD became more broadly tradable after the clawback amendment took effect in January 2025, which allowed RLUSD to float directly on-chain and expanded its DEX listings. These protocol updates underlie current AMM operations.

How do RLUSD-XRP pools rebalance when XRP price moves?

Pools use an automated rebalancing mechanism: when XRP falls in price relative to RLUSD, the pool swaps RLUSD for XRP to restore the product constant; when XRP rises, the pool converts XRP into RLUSD. This automatic adjustment maintains pool invariants and provides continuous liquidity without order books.

What do AMM pool tokens represent and how do holders earn?

AMM pool tokens represent a proportional claim on combined RLUSD and XRP reserves. As trading generates fees, the combined pool value grows; the constant-product formula implies token value appreciates over time with activity. Token holders thus gain exposure to both assets and benefit from fee accrual.

Frequently Asked Questions

How can I add liquidity to an RLUSD-XRP pool?

Use an XRPL-compatible wallet that supports AMM functions, deposit equal-value RLUSD and XRP into the chosen pool, and accept pool tokens representing your proportional share. Monitor the pool for fees and rebalancing effects.

Why does RLUSD integration matter for XRPL DeFi?

RLUSD provides a stable-value anchor on the XRPL, improving on-ledger trading options and reducing friction for dollar-pegged activity. The clawback amendment (Jan 2025) enabled RLUSD to float on the ledger, broadening liquidity and DeFi participation.

Key Takeaways

• Automated liquidity: RLUSD-XRP AMMs replace order books with pooled liquidity for continuous trading.
• Proportional tokens: Pool tokens reflect a claim on combined reserves and accrue value via trading fees.
• Protocol-driven growth: XLS-30D (Mar 2024) and the RLUSD clawback update (Jan 2025) enabled broader DeFi use and enhanced liquidity on XRPL.

Conclusion

The integration of the RLUSD stablecoin into XRPL AMM pools has strengthened on-ledger liquidity and expanded XRPL DeFi options. Protocol amendments and automated rebalancing mechanics mean liquidity providers earn fees while retaining proportional exposure to RLUSD and XRP. Monitor pool performance and protocol updates for timely decisions.