New Means For XRP Holders to Generate Passive Income Without Impermanent Loss

The XRP community has been excited about the upcoming Automated Market Maker (AMM) since its proposal last year, with Ripple Chief Technology Officer (CTO) David Schwartz expressing excitement about the amendment shortly after it was announced.

One major reason for the excitement is that the AMM promises to allow users to earn passive income on their XRP holdings.

Read Also: Expert Shares How XRP Holders Can Earn Passive Income On XRP Ledger AMM

However, Crypto Eri (@sentosumosaba), a well-respected figure within the XRP community, revealed a new development in a recent post that could offer more than the AMM.

The new protocol aims to offer a compelling alternative to existing AMM strategies that can expose users to impermanent loss. She believes this new protocol will be popular among the community members.

What is the New XRPL Protocol?

While details regarding the protocol’s specific mechanisms remain under wraps, Crypto Eri indicated that further information will be unveiled later this week.

Additionally, she hinted that the team behind the protocol is closely linked to the Wave of Innovation crew, the organizers of the upcoming XRP Gold Coast 2024 Conference scheduled for later in March.

The XRPL AMM and the New Protocol

This news emerges amid the XRP community’s heightened anticipation surrounding the proposed AMM feature outlined in the XLS-30 amendment. While the AMM’s implementation had to be initially delayed due to a discovered bug, a recently implemented amendment has addressed this issue, and the feature has garnered significant support from XRP validators.

Once operational, the XLS-30 AMM will allow XRP holders to earn passive income by contributing their tokens to liquidity pools on decentralized exchanges (DEXs). However, it is crucial to note that, as with other traditional liquidity provision methods, users participating in the XLS-30 AMM would still be subject to the risk of impermanent loss.

This is where the newly announced protocol, separate from the XLS-30 AMM, presents itself as a potentially attractive alternative. While specific details remain undisclosed, the promise of earning passively on XRP holdings without impermanent loss risk has captured the attention of the XRP community.

Read Also: Ripple CTO Reveals How XRP Holders Can Earn Passive Income With XRP

With these spectacular promises, this development could be a significant step forward for XRP holders seeking new avenues to leverage their holdings.

Meanwhile, Ripple CTO David Schwartz recently revealed that the AMM could have a limited impact on XRP’s volatility, and this new protocol, offering more than the AMM, could do more to mitigate XRP’s volatility.

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