Ripple Ledger proposes new AMM to boost DeFi capabilities

Ripple Ledger (XRPL) is proposing a new Automated Market Maker (AMM) system to enhance its DeFi capabilities, CoinDesk reported. A draft proposal outlines plans to add features like concentrated liquidity and StableSwap models to the existing XRPL AMM. The core of the proposal is to give liquidity providers (LPs) direct control over how their pools' prices are formed. The current XRPL AMM distributes liquidity uniformly across all price ranges, a method considered inefficient for assets like stablecoins. The concentrated liquidity model would allow LPs to focus capital within specific price bands where most trading occurs, increasing capital efficiency. The StableSwap model is optimized for trading assets with minimal price differences, such as dollar-pegged stablecoins and wrapped assets. Additionally, a fully programmable Smart AMM is planned for future development under a separate specification.