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A Single <a href="https://jpyxx.com/xrp-usd/">XRP</a> Ledger Proposal Just Put The Entire DeFi World On Notice — Here’s Why

A proposal submitted on May 26th suggests a major overhaul of how liquidity pools work on the XRP Ledger. The changes would add different types of pricing curves, allow for concentrated liquidity – meaning more efficient trading – and lay the groundwork for a fully customizable automated market maker (AMM) system, similar to the most sophisticated decentralized exchanges currently available on Ethereum.

A new proposal, called AMM Swappable Curves and identified as XLS Discussion #547, has been submitted by Denis Angell and Roman Thpt – both developers who actively work on the XRPL software. It’s currently being reviewed by the community on GitHub. This proposal expands on XLS-30, which first brought automated market makers to the XRPL network in 2024.

The Problem The Proposal Solves

The XRP Ledger’s automated market maker currently uses a standard formula – the constant product formula – which is also used by Uniswap v2. This means liquidity is evenly distributed across all price points. However, a new proposal has highlighted three key weaknesses that are hindering the system’s ability to compete effectively.

One problem is that spreading liquidity too thinly isn’t efficient. Only a small amount of it is actually used around the current price, making it less appealing for those providing it compared to more focused options. Another issue is the lack of flexibility. Different types of trading pairs perform best with different liquidity pool designs: volatile pairs need constant product pools, stablecoin pairs benefit from designs that reduce slippage, and less common or unevenly weighted pairs work best with customizable weighting systems.

The proposal suggests that combining everything into a single model creates limitations. A key benefit is flexibility. The XRPL payment system currently works with both automated market makers and its standard order book. Integrating more diverse options would increase available funds without needing to alter how it finds the best routes.

What The Amendment Would Introduce

This proposal introduces a flexible system for how liquidity pools are designed. When a new pool is created, the person creating it can choose from three different types of curves. The first option, Curve 0, is the current standard and works exactly like existing pools. Curve 1 offers concentrated liquidity, similar to Uniswap v3, which lets providers focus their funds on specific price ranges for better efficiency. Curve 2 is designed for stablecoins and similar assets, mirroring the original Curve Finance v1, and prioritizes minimizing price slippage.

A new type of curve, called Smart AMM, is planned for a future update. It will let pool creators use custom code (WebAssembly) to control exactly how swaps happen, including setting dynamic fees and adding actions that trigger before or after deposits, withdrawals, or trades. This design is similar to the technology being developed for Smart Escrows (XLS-100), allowing the XRPL to reuse the same core code for multiple features, streamlining development.

Why It Matters For XRP

Instead of one, each token pair could have several different liquidity pools – one for each type of curve. These pools would all run at the same time without disrupting existing ones. The XRPL would intelligently direct transactions to the best available pool automatically, choosing the most efficient source of liquidity. This would happen seamlessly, without requiring any changes from users or developers, according to the technical details.

This is a major advancement for the XRP Ledger’s ability to support decentralized finance (DeFi). With over $2 billion in real-world assets already represented as tokens and nearly $2 billion in stablecoins transferred each month, adding features like those found in Uniswap v3 and Curve Finance would create a more sophisticated and reliable system for on-chain liquidity. This is the kind of infrastructure that financial institutions – asset managers, banks, and stablecoin companies – who are currently building on the XRP Ledger will need as they grow.

Cover image from Grok, XRPUSD chart from Tradingview

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2026-05-27 17:11