Insights on Generating Passive Income with XRP Amid AMM Delay: Pundit’s Perspective

Prominent XRP community figure Zach Rector recently elaborated on the growing discourse around XRP holders benefitting from a passive income stream with their XRP portfolio.

Passive Income With XRP!https://t.co/gMunVlJGBj

— Zach Rector (@ZachRector7) February 12, 2024

XRP Welcoming DeFi Capability

Rector highlighted that crypto market participants lock up millions of dollars worth of XRP as collateral or for providing liquidity on other chains amid XRPL’s lack of AMMs. However, he emphasized that this scenario is poised to change in the upcoming months.

Rector first highlighted the delayed implementation of the XLS-30 automated market maker (AMM) amendment. Notably, this amendment aims to introduce liquidity staking to the XRP ecosystem.

The AMM attained the crucial 80% consensus a few weeks ago. However, the discovery of a bug led validators to withdraw their endorsement of the amendment.

Despite this outcome, Rector noted that progress is underway towards the success of the implementation.

The analyst emphasized that this development is exceptionally bullish for XRP as it positions the asset for broader adoption.

In parallel, he commented on XRP’s recent underperformance, which has led some prominent figures to lose hope in the asset. Rector urged that the XRP ecosystem is entering a phase rich with DeFi capabilities, potentially bolstering XRP’s value.

Also, he highlighted the potential emergence of the EVM side chain, connecting the ecosystem to millions of developers and EVM smart contracts.

XRPL as the Premier Source of Liquidity Globally

In line with these observations, Rector pointed out that Ripple is uniquely positioned to serve as a lender of last resort for the XRP ecosystem.

He highlighted that Ripple possesses a substantial amount of XRP to position the XRP Ledger as the premier source of liquidity globally for specific trading pairs and currencies.

Specifically, Rector elaborated that Ripple holds approximately 40 billion XRP, which it can allocate to automated market maker liquidity pools. He argued that this deployment of liquidity enhances and maintains flows within XRPL in a manner unprecedented in the rest of the space.

XRP AMM will Outpace Rivals

Meanwhile, Zach Rector revealed that he recently initiated testing of the AMM on XRP’s rival chain, Stellar (XLM). He sought to familiarize himself with these AMMs and their functionalities.

He mentioned allocating a small amount of liquidity for XLM and Stronghold (SHX) to experiment in anticipation of what is forthcoming for the XRP Ledger.

Based on his observations, he argued that the XRP Ledger’s forthcoming AMM will surpass the capabilities of existing DeFi platforms. He grounded his viewpoint on Ripple’s capacity to inject billions of XRP into these liquidity pools.

Source