thecryptobasic.com
Amid the launch of automated market maker (AMM) functionality on the XRP Ledger (XRPL), Hugo Philion, co-founder of Flare Network, has pointed out its potential utility for the proposed FAssets system.
In a recent post on X, Philion expressed satisfaction that AMM capabilities are now available on the XRP Ledger.
“I am particularly glad that there is now an AMM on XRPL,” Philion remarked. The factor behind his delight is the AMM’s potential usefulness for the Flare Network’s FAssets system.
I, for one, am particularly glad that there is now an AMM on XRPL. It will be useful for FXRP agents that need to source XRP. Clearly there are some kinks to be ironed out but that will happen.
— Hugo Philion ☀️ (@HugoPhilion) March 24, 2024
In particular, Philion disclosed that the XRPL’s AMM capability would be advantageous for FXRP agents that need to source XRP.
For context, FXRP is one of the minted tokens of the Flare Network’s FAssets system. This system seeks to bring smart contract capabilities to assets without native support for smart contracts like XRP, Bitcoin, and Dogecoin.
With FXRP, FBTC, or FDOGE, holders can participate in DeFi activities such as staking via the Flare Network, earning yields, and generating passive income. As The Crypto Basic reported previously, the FAssets system seeks to unlock the untapped potential of over $1.3 trillion in tokens without smart contract functions.
How FXRP Works
Through FXRP, any XRP holder can transfer their token to a specific set of addresses, referred to as agents. Subsequently, the agents will utilize smart contracts on Flare to mint FXRP for the sender.
Notably, the newly created FXRP remains redeemable at a one-to-one ratio with XRP. Should a user wish to exchange their FXRP for XRP, they can return the FXRP token to the Flare smart contract. Following this, the agents will transfer the equivalent amount of XRP to the user’s address on the XRP Ledger.
XRP AMM is Useful for FXRP Agents
For agents looking to source XRP, the Flare Network founder recognizes the benefit of the recently launched XRPL AMM functionality. Emphatically, the new XRP AMMs can serve as marketplaces where individuals conveniently trade XRP without requiring a counterparty on the opposite side of the transaction.
Prior to the introduction of the AMM, liquidity on the XRPL DEX depended entirely on manual market-making efforts.
Meanwhile, Hugo Philion remarked that for FXRP agents to leverage the XRPL AMM effectively, specific issues need to be addressed. In parallel, he expressed confidence that these challenges will be resolved in due course.
Members of the XRP community, including Wietse Wind, founder of XRPL Labs, have expressed agreement with Philion’s perspective. Notably, the Flare Network team is currently testing out FAssets.