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Ripple CTO Emeritus David Schwartz interacted with one of his tweets on the XRP Ledger dating back to Dec. 17, 2024.
In the tweet, Schwartz stated that the XRPL "is" a DEX; in fact, it is the world's first DEX, fully functional since 2012.
Reacting to this, an X user asked if the AMM feature was native to the XRP Ledger; to this, the Ripple CTO emeritus answered in the affirmative, saying that the AMM is a ledger feature. He added that this guarantees that tools like wallets can understand fully the consequences of interacting with the AMM and DEX.
Prodding further, the X user asked why this was important and the essence of going through this route.
Answering this, Schwartz stated that there are advantages and disadvantages to both approaches. One of the main advantages of this approach, according to the Ripple CTO emeritus, is that users do not have to risk interacting with smart contracts that may be malicious or buggy, and AMMs do not have "owners" as middlemen who "tax" the liquidity providers.
There are advantages and disadvantages to both approaches. The main advantages to this approach is that the user doesn't have to risk interacting with smart contracts that may be malicious or buggy and AMMs don't have "owners" as middlemen who "tax" the liquidity providers.
— David 'JoelKatz' Schwartz (@JoelKatz) January 14, 2026
Schwartz highlighted what might be the biggest disadvantage, at least in the current implementation — that it is heavily optimized for volatility harvesting and might not perform as well in cases where there is little volatility to harvest, such as between two stablecoins.
XRP Ledger AMM explained
Automated Market Makers (AMMs) provide liquidity to the XRP Ledger's decentralized exchange (DEX), with each AMM holding a pool of two assets. One of these can be XRP, and one or both of them can be tokens (any other asset on the XRPL except XRP; stablecoins are a common model for tokens on XRP Ledger).
Users can swap between the two assets at an exchange rate set by a mathematical formula.
AMMs are integrated with the central limit order book (CLOB)-based DEX to enhance liquidity. Offers and payments are automatically optimized to decide whether swapping within a liquidity pool, through the order books, or both, provides the best rate and executes accordingly.