*Neil Hartner, a senior software engineer at Ripple, has revealed a hidden “superpower” of the XRP Ledger (XRPL) that could revolutionize the world of decentralized finance. Hartner's discovery revolves around the concept of one-way deposits in XRPL's automated market makers (AMMs).
This breakthrough allows users to contribute liquidity to pools even if they cannot hold one of the assets needed for a particular pool due to restricted access. Hartner shared that as long as individuals hold one of the assets, they can make one-way deposits and withdrawals from the pool, limited only to the assets they are authorized to hold.*
Is this a new breakthrough for the crypto industry or what other bile storm vulnerabilities exist? Let's find out with FinFan through the following article.
Since blockchain was born, they have helped a lot in making payments and transferring money between people in countries faster and less costly.
However, transferring digital assets between each other must go through another complicated step of being on the pool and waiting in line for a certain gas cost so that the crypto money can reach the recipient's account.
Even when trading through a pool, users are also affected by the exchange rates of currency pairs as well as cryptocurrencies.
XRPL's automated market makers (AMMs) will help you do that with functionality that allows you to manually set exchange rates between parties involved in the money or asset transfer process. Then, the AMM system will average that exchange rate and send the most suitable exchange rate to the end user.
According to Hartner shared on X as follows:
“Now, if there are any offers on the order book that are higher than 0.454 then those offers will be matched by the AMM as part of the deposit rebalancing. So, then you can get something else with 11,000 XRP and 5,000 USD in the pool.”
Previously, this AMM tool was often used for traders in the coin trading market when users could place buy and sell orders with AMM instead of trading with other users.
Another special point of XRPL AMM according to Neil Harter on X:
“Interesting thing I learned about the XRPL AMM. If there’s a liquidity pool for a restricted token (i.e. requires an authorized trustline) that you can’t hold, you can still provide XRP as liquidity to the pool. I don’t think this is possible with most other AMMs.”
All of the above advantages will help XRPL AMM minimize currency conversion costs and gas costs incurred compared to switching between users.
All of the above advantages will help XRPL's AMM minimize currency conversion costs and gas costs incurred compared to switching between users. Money reaching the end user still ensures a stable exchange rate and does not differ too much (if there is, the sender will receive that difference back in their wallet).
This is quite an interesting step forward for XRPL's AMM. They know how to take advantage of their strengths in another industry to apply it to the one-way money transfer industry (also known as transferring remittances from 2 people in any 2 different countries).
At the same time, with this tool, the recipient can receive money in fiat currency directly to their wallet without spending an extra offramp step.