The XRP Ledger activates AMMClawback, which improves conformance in AMM pools. RLUSD can now participate in AMM pools to increase liquidity and DeFi on XRPL.
The AMMClawback amendment has been activated by the XRP Ledger (XRPL), a significant update that aims to enhance the regulatory compliance of its Automated Market Maker (AMM) pools. The upgrade, which received a 91.43% consensus from validators, guarantees that token issuers control assets deposited in liquidity pools under specific conditions.
The AMMClawback feature of the XRP Ledger has been activated, improving the compliance of the AMM Pool
The AMMClawback amendment has been effectively implemented by the XRP Ledger, as confirmed by XRPScan in a recent post on the X platform. This update introduces new regulations that govern liquidity pools, with a particular emphasis on tokens that are subject to regulatory requirements.
The amendment allows token issuers to retrieve assets from AMM pools under specific conditions. Users cannot deposit new assets into the liquidity pool affiliated with a frozen token. This restriction serves to prevent unauthorized transactions that involve suspended tokens.
Furthermore, this development occurred mere days after Ondo Finance announced its intention to broaden the use of tokenized assets. The OUSG deployment on XRPL will improve institutional liquidity and regulatory compliance. The news resulted in a significant increase in ONDO and XRP prices, indicating robust market confidence.
It is now feasible to establish an XRP/RLUSD AMM pool
The AMMClawback amendment is now operational, which enables the establishment of an XRP/RLUSD AMM pool. This development will enhance the liquidity of both XRP and Ripple USD (RLUSD), a stablecoin introduced in December 2024.
RLUSD was previously unable to participate in AMM pools as a result of its built-in clawback feature. The RLUSD holders can now contribute liquidity and trade seamlessly within the XRP Ledger ecosystem, as this restriction has been lifted. This enhancement can potentially improve the activity of decentralized finance (DeFi) on the network.
Major exchanges have consistently increased the adoption of Ripple’s stablecoin since its launch. Investor confidence is bolstered by the reserve report of RLUSD, which affirms their strong backing. As a result, its most recent listing on Margex broadened its exposure to high-leverage trading.
New AMM Pool Regulations for Token Issuers and Wallets
The amendment establishes more stringent deposit regulations for liquidity providers. Wallets cannot deposit single-sided or double-sided assets into an AMM pool if one of the associated tokens is frozen. Furthermore, unauthorized accounts are limited to a single deposit if the associated asset is permitted.
Instead of the conventional clawback transaction, token issuers must now employ the AMMClawback function to retrieve assets from pools. This offers a methodical approach to ensuring compliance without interfering with the regular trading activity on the XRP Ledger.
The amendment was approved with 28 out of 35 ballots from validators, surpassing the 80% threshold. Furthermore, the XRP Ledger community anticipates that this modification will enhance regulatory alignment and increase the availability of decentralized liquidity.