HomeFinance NewsOver 2.1 million XRP locked in XRPL AMM pools as supply shock...

Over 2.1 million XRP locked in XRPL AMM pools as supply shock approaches.

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The XRP locked in XRPL AMM pools has exceeded 2.1 million, sparking speculation about a potential XRP supply shock. The integration of impactful DeFi protocols, including the AMM functionality, has enhanced the XRP Ledger’s resilience and attracted significant interest from network participants. Despite a temporary setback due to a bug that resulted in a decrease in locked XRP, trading activities resumed after a fix, leading to a surge in liquidity provision across multiple pools.

The latest data from XRPL explorer XRPScan reveals that over 2.1 million XRP are currently locked in 317 active AMM pools, with the USDC/XRP pool holding the largest volume. While the amount of XRP locked represents only a small fraction of the circulating supply, market commentators, like Zach Rector, believe that the AMM functionality could potentially lead to a looming XRP supply shock. A supply shock is characterized by a sudden change in an asset’s available supply, impacting scarcity and potentially influencing price trajectory, though the current amount of XRP locked may not be significant enough to trigger such an event.

Despite the limited impact on XRP’s circulating supply at the moment, the increasing rate of tokens being locked in AMM pools is fueling optimism for future adoption. Rector suggests that these pools could potentially capture a larger portion of XRP’s supply over the next five to ten years. While the effect of the AMM functionality on the XRP supply remains uncertain, the trend of locking tokens in these pools points towards a potential shift in the landscape of XRP trading and liquidity provision in the future.

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