Automated market maker (AMM)
Plain definition. An automated market maker is a pool of two assets on the XRP Ledger’s decentralized exchange that lets you swap between them at a rate set by a mathematical formula.
Technical definition. Automated Market Makers provide liquidity in the XRP Ledger’s decentralized exchange; each one holds a pool of two different assets, at most one of which can be XRP, and there can be up to one AMM for any given pair. The ledger implements a geometric mean AMM with a weight parameter of 0.5, so it functions like a constant product market maker, setting its exchange rate from the balance of assets in the pool and charging a percentage trading fee on top. Liquidity providers who deposit assets receive LP tokens, which they can redeem for a share of the pool’s assets, including fees collected.
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On this site, Automated market maker (AMM) comes up in How do XRP Ledger AMMs work, and can XRP holders earn fees in them?, How much liquidity is in XRPL AMMs, and why do figures differ?, Can institutions use XRPL AMMs through Ripple’s APIs?, What features does the XRP Ledger have today, and what new ones (like lending) are coming? and How deep is XRP’s market liquidity, and is it enough for global settlement?.
Source
Automated Market Makers (AMMs) (xrpl.org), read October 1, 2026.
Pages that cover Automated market maker (AMM)
- How are XRP yield, lending income, AMM fees and airdrops taxed?
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- How deep is XRP/RLUSD liquidity on the XRPL DEX?
- How do XRP Ledger AMMs work, and can XRP holders earn fees in them?
- Can institutions use XRPL AMMs through Ripple's APIs?
- What features does the XRP Ledger have today, and what new ones (like lending) are coming?
- How deep is XRP's market liquidity, and is it enough for global settlement?
- What is the XRP liquidity flywheel, and is it running?
- What are the risks of earning yield on XRP through AMM pools or wrapped XRP?
- Is DeFi TVL a good measure of XRP liquidity, and what should be measured instead?
- How much liquidity is in XRPL AMMs, and why do figures differ?