XRP Ledger Amendment to Allow Creation of XRP/RLUSD AMM Pool Set to Pass Today

The XRP Ledger (XRPL) is on the verge of a major upgrade that will enable the creation of an Automated Market Maker (AMM) pool for Ripple USD (RLUSD). 

Notably, the amendment, with code XLS-73d, has already surpassed the required 80% validator consensus and will go live today, Jan. 30, 2025, at 7:37 PM UTC. This development could boost liquidity for XRP and bolster trading opportunities on the XRPL decentralized exchange (DEX).  

Why This Amendment Matters

AMMs are important for DeFi as they allow users to trade assets without traditional order books. The XRPL welcomed the AMM functionality last March, allowing market participants to earn from providing liquidity on select pools.

However, RLUSD, the Ripple stablecoin, has been unable to participate in AMM pools because of a specific restriction despite launching last month. The issue is due to the clawback feature, which allows the entity behind a token to retrieve assets in cases involving regulatory concerns, criminal activity, or transactions with sanctioned entities.  

The clawback feature went live in February 2024 and currently, XRPL rules prohibit tokens like RLUSD with this feature from being included in AMM pools. This restriction has prevented RLUSD holders from benefiting from automated liquidity provision and trading within the XRPL ecosystem.  

To resolve this, the XRPL community introduced amendment XLS-73d, which modifies how clawback-enabled tokens interact with AMM pools. The amendment has gained strong support, with 91.43% of validators voting in favor—well above the 80% threshold necessary for approval.  

XRPL AMMClawback XRP Scan
XRPL AMMClawback | XRP Scan

How the AMMClawback Amendment Works 

The new amendment introduces a feature called AMMClawback, which allows token issuers to reclaim assets in AMM pools if the token has the clawback option enabled. This ensures that issuers can maintain compliance with regulatory standards while allowing their tokens to be traded through automated liquidity pools.  

Details of the amendment suggest that if a token in an AMM pool is frozen by its issuer, users will no longer be able to deposit the paired asset into that pool. Also, if an issuer does not authorize a wallet to hold a particular token in the pool, this will stop the wallet from depositing the other paired asset.  

In addition, while the amendment allows issuers to clawback tokens within AMM pools, they will need to use the AMMClawback feature to retrieve assets instead of the standard Clawback transaction.  

Potential Impact on the XRPL Ecosystem

Once the amendment goes live, an XRP/RLUSD AMM pool will be possible, and this could improve liquidity for both assets. Recall that the Ripple CTO David Schwartz previously suggested that the RLUSD stablecoin could benefit XRP by boosting liquidity.

As the amendment takes effect, the XRPL community anticipates growth in DeFi activity. A popular XRPL meme coin account recently highlighted the importance of this development, stating that the amendment will make XRPL the cheapest, fastest, and safest place to trade assets.

DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.