Here is When XRP Holders Will Earn Passive Income with Their XRP

With the XRP Ledger automated market maker (AMM) amendment gaining more endorsement from validators, the door for the XRP Army to earn passively with their holdings opens gradually.

Anodos Finance founder Panos Mekras recently drew attention to the growing percentage of XRPL validators endorsing the XLS-30D AMM Amendment. At the time of the disclosure, 20 validators have voted yes to the amendment, marking a 57.14% consensus.

20 UNL validators are now voting Yes on the #XRPL AMM amendment. We are getting closer. https://t.co/2JR5mdf6av pic.twitter.com/MbULZDzSJw

— Panos ?{X} (@panosmek) January 22, 2024

However, data from XRPL blockchain explorer XRPScan suggested the consensus is now 60% at press time. This results from 21 validators endorsing the amendment.

Notably, this new figure marks an outstanding advancement compared to the 16 yes and 18 no votes recorded on December 7.

XRP Army Soon to Earn Passive Income with Their XRP

Significantly, the successful approval of the XLS-30D AMM Amendment presents a unique opportunity for XRP holders to generate passive income from their holdings.

The key feature of this amendment is integrating automated market maker functionality into the XRP Ledger, seamlessly connecting it with the existing decentralized exchange.

Fundamentally, it introduces a liquidity staking pool for XRP holders. Individuals will have the opportunity to contribute liquidity to the AMMs. They will gain a proportionate share in earnings and share the associated exchange risk. 

Notably, each AMM instance possesses a dedicated account to secure its assets, issuing liquidity pool tokens to liquidity providers in proportion to their deposits.

Moreover, XRP liquidity providers can vote on the AMM’s trading fee, which is determined by their share of LP assets.

In a community poll by Stedas last November, 75% of members expressed their willingness to engage in AMM liquidity provider services to earn passive income.

Road to Implementation 

Meanwhile, the implementation of this smart contract functionality hinges on securing an 80% endorsement from XRPL validators.

Besides, there have been apprehensions surrounding its potential drawbacks. It includes concerns of heightened market volatility and susceptibility to manipulation such as front-running. Concerns that AMMs might contribute to centralization within the system have also emerged.

Significantly, the XLS-30D code base undergone a comprehensive audit by the reputable security firm CertiK. The security firm granted it an impressive security score of 95/100.