One of the XRP Ledger’s biggest weaknesses as a DeFi venue could be about to disappear.
A draft amendment titled “AMM Exchangeable Curves” was submitted to the XRPL standards repository on Tuesday, proposing to extend the network’s existing automated market maker with three types of pluggable curves: constant commodity, concentrated liquidity, and StableSwap.
A fourth fully programmable curve type called Smart AMM is reserved for a tracking specification. AMMs refer to automated market makers, a type of decentralized exchange where transactions are made against a set of deposited tokens rather than between buyers and sellers.
The proposal was written by XRL lead developers Denis Angell and Roman Thpt, and would require a separate amendment vote before activation. For now it is still in draft.
What it would do is allow liquidity providers on the XRPL to choose how their pool values the assets. The current setup spreads liquidity evenly across all possible prices, which is fine for volatile pairs but burns capital for stablecoin pairs and correlated assets.
Concentrated liquidity allows liquidity providers (or users who supply their tokens to a protocol in exchange for capturing a portion of fees) to target a narrow band where most transactions actually occur, producing much more usable depth per dollar deposited. StableSwap is designed for assets that trade close to 1:1, such as dollar-pegged stablecoins or wrapped representations of the same asset.
XRPL has been quietly building institutional tokenization volume: More than $3 billion in real-world tokenized assets are currently on-chain, including a Ripple-JPMorgan pilot earlier this month that processed a tokenized U.S. Treasury swap in less than five seconds.
But moving institutional capital up the chain is a part of any financial strategy. Allowing that capital to earn returns, be borrowed, or efficiently traded against other tokenized assets requires DeFi rails that actually work for the task.
Concentrated liquidity, in particular, has become the standard for capital-efficient AMMs in major DeFi ecosystems, with around 60% of AMM volume now running through some version of it, according to data citations from the proposal itself. XRPL’s current AMM is missing that since its launch in 2024.
The amendment also keeps existing pools intact. Groups created before the new curves are activated remain in the constant product model without the need for migration. Group creators choosing from the new menu would do so at creation time, with the curve type locked for the life of the group.
XRP was trading at $1.34 in US morning hours on Tuesday. Whether the AMM update arrives in time to aggravate the institutional narrative depends on the amendment process, which can last months and is not guaranteed to be approved.
