Ripple (XRP) AMM Glitch Scrutinized as Investors Face Transaction Woes

On March 27, 2024, Ripple (XRP) investors encountered glitches in XRPL Ledger's AMM pools, prompting the team to advise against funding them until further updates. The issue affected liquidity flow and is being resolved by a team including tequ, XRPL community, RippleX, and Orchestra Finance.

Ripple (XRP) AMM Malfunction Leads to Transaction Glitches, Prompting Investor Caution

San Francisco, California, March 27, 2024 - On Monday, Ripple (XRP) investors faced challenges in executing transactions on the XRPL Ledger's automated market maker (AMM) pools. The incident, which affected liquidity flow and disrupted payment engines, has prompted the Ripple team to issue guidance and updates to the public.

According to the Ripple blog, a team consisting of tequ, the XRPL community, RippleX, and Orchestra Finance swiftly identified the AMM malfunction and implemented rapid corrective action. The blog post emphasized that the developers have resolved the XRPL glitch and are currently undergoing rigorous review and testing procedures prior to releasing the fix.

However, before the official release of the update, XRP Ledger validators must vote to approve the proposed solution. The amendment requires the support of 80% of participants within a two-week period before activation can occur. In the meantime, Ripple strongly advises market participants and XRP traders to redeem their liquidity provider (LP) coins and refrain from depositing funds into XRPL's AMM pools until a definitive resolution is reached.

The AMM bug fix is currently available for review on GitHub and will be included in the upcoming 2.1.1 release of rippled. RippleX has announced that it will publish a detailed blog post tomorrow outlining the incident, its causes, and the steps taken to address the situation.

Ripple (XRP) Price Outlook

In the wake of the AMM malfunction, XRP's price has experienced a bearish downturn, losing 4.25% in the past day and settling at $0.6203. The weekly chart indicates that XRP has been consolidating sideways below a resistance level of $0.75 since July 2023.

Analysts note that XRP has consistently rebounded whenever it has reached the $0.4743 support level, gradually moving towards the $0.75 resistance. If XRP manages to breach this hurdle, it could potentially rally towards $0.86 before continuing its upward trajectory to new all-time highs (ATHs).

However, should a sudden bearish trend emerge, triggering a weekly candle close below the $0.4743 support, it could jeopardize the anticipated recovery. Such a scenario might lead to a sharp drop in XRP's price, potentially pushing it towards the liquidity level at $0.2879.

Conclusion

The AMM malfunction on the XRPL Ledger has caused temporary disruptions to XRP transactions and liquidity. While Ripple has swiftly addressed the issue and implemented a fix, the need for validator approval and the impending vote may delay the full restoration of AMM functionality.

Investors should exercise caution and adhere to Ripple's guidance by redeeming LP coins and avoiding deposits into AMM pools until further notice. The release of the official fix and the results of the validator vote will determine the timeline for AMM reactivation and the subsequent impact on XRP's price.