In a recent exclusive interview with Eri, a prominent YouTuber and a key figure in the XRP community, Ripple’s Lead Product Manager, Cooper, addressed concerns regarding the potential impact of Automated Market Makers (AMM) on XRP’s tokenomics. The interview aimed to shed light on the implications of the forthcoming AMM launch on the XRP Ledger (XRPL).
Reason Why AMM will affect XRP‘s tokenomics
Eri questioned Cooper about the likelihood of the AMM affecting XRP’s tokenomics upon its official launch on XRPL. This query stems from ongoing discussions within the XRP community, with some suggesting that the introduction of AMM could transform XRP into more of a stablecoin.
To counter such assertions, crypto author Panos Mekras recently emphasized the immutability of XRP’s tokenomics, debunking the notion that the AMM could trigger fundamental changes. Mekras, along with Eri, highlighted that XRP’s inherent volatility aligns with the nature of the AMM, making it unnecessary for XRP to pivot to a stable asset.
Cooper echoed these sentiments in the interview, expressing her belief that the AMM would not alter XRP’s tokenomics. She clarified that XRP functions on the XRPL as a utility token for gas and account reserves, stating, “I don’t think it’s going to change the tokenomics.” Cooper dismissed claims of any significant shifts in XRP’s fundamental structure.
The #AMM will harvest volatility.
Why in the world would it turn #XRP into a stablecoin? 🤦♀️— 🌸Crypto Eri 🪝Carpe Diem (@sentosumosaba) November 14, 2023
However, while emphasizing the stability of XRP’s tokenomics, Cooper acknowledged the potential positive impact of the AMM on XRP. According to her, the AMM’s introduction could lead to a heightened demand for XRP, subsequently enhancing its utility. She remarked, “[…] as we see growth and adoption, I think we’ll just see a greater need and greater utility of the token itself.”
AMM is now embedded in the XRPL version rippled v1.12.0.
The AMM, introduced through the XLS-30D Amendment, is currently embedded in the XRPL version rippled v1.12.0. However, concerns have been raised within the community as the validator consensus for the AMM has not reached the requisite level. As of the latest update, the ongoing voting for the amendment stands at a 40% consensus. Notably, 14 validators, including Ripple and Bithomp, have voted in favour, while 21 validators maintain a Nay vote.
The XRPL community awaits the outcome of the ongoing voting process, with the potential implementation of the AMM poised to bring new dynamics to the XRP ecosystem. The interview with Cooper provides valuable insights, reassuring the community about the resilience of XRP’s tokenomics while highlighting the potential for increased utility in the face of AMM adoption.