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.

The XRP Ledger (XRPL) is set to receive a major upgrade that will pave the way for the creation of an Automated Market Maker (AMM) pool for Ripple USD (RLUSD).

The amendment, code-named XLS-73d, has already achieved the required 80% validator consensus and will go live today, Jan. 30, 2025, at 7:37 PM UTC. This development is expected to boost liquidity for XRP and expand trading opportunities on the XRPL decentralized exchange (DEX).

Why This Amendment Is Important

AMMs play a crucial role in decentralized finance (DeFi) by enabling users to trade assets without the need for traditional order books. The XRPL introduced AMM functionality in March 2024, allowing market participants to earn from providing liquidity in select pools.

However, despite launching last month, RLUSD — the Ripple stablecoin — has been unable to participate in AMM pools due to a specific restriction. This limitation arises from 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 was introduced in February 2024, and XRPL rules currently prohibit tokens with this feature from being included in AMM pools. As a result, holders of RLUSD are unable to automate liquidity provision and trading within the XRPL ecosystem.

To address this issue, the XRPL community proposed 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.

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.

According to the details of the amendment, 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. Additionally, 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.

Furthermore, 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 is live, an XRP/RLUSD AMM pool will become possible, which could improve liquidity for both assets. It's worth noting that Ripple CTO David Schwartz previously suggested that the RLUSD stablecoin could benefit XRP by boosting its liquidity.

As the amendment takes effect, the XRPL community is expecting a boost in DeFi activity. A popular XRPL meme coin account recently highlighted the significance of this development, stating that the amendment will make XRPL the "cheapest, fastest, and safest" place to trade assets.