Panos Mekras says the XRPL needs high-quality assets like stablecoins and RWAs to fix stagnant AMM liquidity despite rising pool count.
Notably, as of May 7, 2025, XRPL’s automated market maker (AMM) ecosystem has recorded a rapid increase in the number of liquidity pools, reaching 19,782. However, XRP liquidity across these pools has remained stagnant since early 2025, hovering around 13.39 million XRP.
The disparity between pool creation and actual capital inflow has raised concerns within the XRPL community. Panos Mekras, co-founder of Anodos Finance, highlighted the issue on X, noting that while token and pool numbers have surged, meaningful growth in XRP-backed liquidity has failed to materialize.
There is an obvious issue: XRPL's AMM has been very stagnant and not much new XRP has been added for months, while the number of pools and worthless tokens keep growing. The only solution is more high quality assets – stablecoins and RWAs (as soon as possible) – combined with… https://t.co/pjQlQvSWuB
— Panos 🔼{X}🇬🇷 (@panosmek) May 7, 2025
Asset Quality Remains Central to Growth Challenges
According to Mekras, the expanding pool count is being driven primarily by tokens with limited utility. He observed that many newly issued tokens offer little to no value, yet continue to extract liquidity from the ecosystem.
He argued that introducing higher quality assets—such as stablecoins from top issuers and real-world assets (RWAs)—is the way to go. Additionally, Mekras emphasized the need for platforms that can enhance onboarding and user interaction with XRPL. In his view, both builders and users must demand better standards from new projects in order to prevent further fragmentation of liquidity.
AMM Pool Composition Raises Usability Concerns
One user on X asked Mekras about pools involving two issued tokens—such as RLUSD paired with a memecoin or another fiat-pegged asset. The question focused on the accessibility of such pools and whether they offer meaningful utility.
Mekras responded that their value depends on demand and liquidity. He warned that low-activity pools can divert resources away from top-performing pools.
As long as there is enough demand and liquidity, this is good. Otherwise you are just splitting liquidity that could go to the top pools. Stable to stable pools are great, but we need more top stablecoins from top issuers as it seems like most people do not prefer or trust…
— Panos 🔼{X}🇬🇷 (@panosmek) May 7, 2025
Despite acknowledging that stable-to-stable pools could be beneficial, he pointed out that user trust in existing stablecoins from GateHub and Bitstamp remains low.
Comparisons with Other Chains
While activity on other blockchains continues to see growth in total value locked (TVL), XRPL’s liquidity has remained relatively unchanged. Mekras noted that competing chains have already attracted billions in TVL and are now seeing renewed momentum.
In contrast, XRPL’s low liquidity persists. He stated that the ecosystem should already rank among the top chains by liquidity, yet lacks the presence of top-tier stablecoin issuers.
A technologist, Hussein Badakhchani, who first called attention to this growing concern, responded that while high-quality assets are important, improving the fee structure to better incentivize liquidity providers could also be effective.
Proposal to Raise the AMM Fee Cap
Badakhchani’s suggestions include a proposal to raise the AMM fee cap from 1% to 2.5%, allowing liquidity providers to vote for higher returns. Another change involves replacing the existing single-fee model with a more granular, operation-specific structure covering XRP and token deposits and withdrawals separately.
To support this, a revamped liquidity provider (LP) voting mechanism was proposed, designed to accommodate the multi-tiered fee model.
The suggestions also call for excluding blackhole wallets from LP vote calculations to prevent inactive addresses from impacting fee adjustments. To ensure continuity, he recommended a backward-compatible migration strategy for existing pools.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
