While everyone seems to be focused on the developments surrounding the case between Ripple Labs and the United States Securities and Exchange Commission, the XRP Ledger has managed to achieve a considerable milestone.
XRPL Hits an Important Milestone
The XRP Ledger (XRPL) is a public blockchain designed to allow for quick, low-cost, real-time transfer of fiat currencies, XRP, and a range of other digital assets.
The network recently achieved a considerable milestone: over 10 million XRP tokens are locked in its AMM pools.
Source: XRP ScanNow, it’s worth noting that this number has declined somewhat in the past hours, currently sitting at around 8.9 million XRP locked across almost 600 AMM pools.
What is an AMM, and Why is This Important?
AMM stands for an automated market maker. Their goal (and by extension, that of their pools) is to provide liquidity in the XRP ledger’s decentralized exchange.
In essence, each pool consists of two assets, and users can swap between them at an exchange rate that’s set by a formula.
Those who lock XRP in the pools are called liquidity providers, and in return for their stake, they receive LP tokens (yield) from the automated market maker.
Therefore, an increased stake in AMM pools generally signals rising investor confidence.
This is especially true, given that XRP’s price has been stagnating throughout the past few weeks, unable to make a considerable move in either direction.
As CryptoPotato recently reported, the cryptocurrency seems to be on the verge of a massive move. This is because its price has been squeezed within the current range for too long, indicating a balance between buyers and sellers. This doesn’t usually last long.
However, the direction of the breakout is likely to determine Ripple’s trend in the mid term.