Can You Earn Passive Income from XRP? Here’s How XRPL AMM Works and What You Should Know!

XRP is no longer just a tool for cross-border transfers. Through the new Automated Market Maker (AMM) feature on the XRP Ledger (XRPL), XRP holders can now earn passive income. But how does it work, and what should you be aware of? First, let’s cover the technical basics. According to the community account “All Things XRP,” users need a compatible wallet. The recommended option is Xaman — formerly known as Xumm. Make sure your wallet is updated to version 2.8 or higher and has a balance of XRP. If you want to participate in pools with non-XRP tokens like USDC or TST, you’ll also need to add a trust line for those tokens. The second step is to connect your wallet to an AMM interface, such as the Magnetic platform. Important: always use official links to avoid fake websites. On the interface, you’ll see a list of available liquidity pools — for example, XRP/USDC or XRP/XPM pairs. From there, you can add liquidity in two ways: by depositing both assets in a pair (which is more efficient with no extra fees) or by adding just one asset (which usually involves an additional fee). It’s recommended to start with the two-asset method to avoid slippage. Once the transaction is confirmed, you’ll receive LP tokens — which act as proof of your share in the liquidity pool. These LP tokens also determine your portion of the trading fees generated by the pool. You can track all your positions and earnings through XRPScan. Since the AMM feature officially launched in March 2024, the ecosystem has expanded rapidly. From just around 300 pools initially, there are now over 18,000 pools with 13 million XRP locked — roughly valued at $30 million. This shows strong user interest in the feature. However, risks remain. Ripple CTO David Schwartz previously warned about impermanent loss — a situation where the value of your pooled assets may be lower than if you’d just held them. So it’s important to fully understand these risks before getting involved. For those looking to earn passive income from XRP, the AMM feature is worth exploring — as long as you stay cautious and avoid rushing in blindly. #xrp #ripple #xrpnews #xrpledger #xrpripplenews #xrpl