The XRP Ledger, (XRPL), has implemented an AMMClawback Amendment. This introduces a new level of regulatory compliance as well as asset control to its Automated Market Maker System (AMM).
On January 30, XRPscan confirmed the amendment was now active after a fourteen-day activation.
AMMClawback – How does it work?
According to the XRPL web site, this new functionality will allow issuers of tokens deposited in an AMM to claw them back if they have enabled clawback on the respective token.
It also reduces risks associated with unauthorized transactions by preventing frozen tokens to enter liquidity pools.
By integrating the feature, XRPL makes sure that tokens which have clawback permissions are able to operate in its native AMM. This gives issuers more control. AMMs play a crucial role in XRPL’s decentralized trading by enabling automated token swaps through liquidity pools.
The amendment will allow issuers the right to recover assets when there is fraud, a regulatory concern, or any other condition that has been predefined.
XRP Ledger: Implications
XRP advocate Luke Thomas highlighted the amendment’s impact, emphasizing that token issuers now have the ability to reclaim assets in cases of fraud, regulatory concerns, or legal disputes.
He claims that the upgrade makes XRPL more attractive for institutional investors, regulated financial institutions, and compliance-focused network like Stellar(XLM), Hedera/HBAR (ALGO).
Thomas added:
“Unlike BTC and ETH, XRP is evolving towards a more regulatory-compliant model, positioning itself as a blockchain solution tailored for enterprises, financial institutions, and governments that require asset control mechanisms!”
Meanwhile, Emi Yoshikawa, Ripple’s former VP, pointed out that the amendment has significant implications for Ripple’s stablecoin, RLUSD. Since RLUSD has clawback functionality, it can now be directly exchanged on XRPL’s decentralized exchange (DEX), improving its liquidity and trading flexibility.
On-chain data suggests that RLUSD has already been the fastest growing pool in terms unique users of the XRPL. The pool exceeded $500,000 within 24 hours after launch.
Artur Kijakulov, CEO of XPmarkets’ analytical platform XRPL, stated:
“RLUSD is now also the 9th largest AMM pool on XRPL.”
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