How do XRP Ledger AMMs work, and can XRP holders earn fees in them?

The full answer

What is an AMM on the XRP Ledger, and is it live?

An automated market maker (AMM) is a pool of two assets that trades at a price set by a formula instead of by posted orders. XRPL.org says: “Each AMM holds a pool of two assets,” and “at most one of these can be XRP.” There is only one pool per pair: “For any given pair of assets, there can be up to one AMM in the ledger.”[1] The formula is “a geometric mean AMM with a weight parameter of 0.5, so it functions like a constant product market maker.”[1] Researchers compared the XRPL design with a generic AMM-based exchange on Ethereum that they describe as “akin to Uniswap’s V2 AMM implementation.”[4]

The pools are part of the ledger itself. XRPL.org reported that “the AMM Amendment to the XRP Ledger went live on March 22, 2024.” Within days “a community member identified a discrepancy in a few AMM pools,” and XRPL.org advised that “it’s best for users to redeem LP tokens and not deposit new funds into AMM pools” until a fix was enabled.[2] That episode is recorded on XRP Ledger outages and incidents.

Pools and order books work side by side. XRPL.org says “Offers and payments are automatically optimized to determine whether swapping within a liquidity pool, through the order books, or both, provides the best rate.”[1] One exception: inside a permissioned DEX, “Permissioned offers and permissioned payments cannot be filled by AMMs.”[9]

How does a depositor earn fees?

A depositor, called a liquidity provider, puts assets into a pool and receives LP tokens that record their share. Fees are not paid out as they arrive. XRPL.org says: “Trading fees are paid to the AMM, not directly to liquidity providers. Liquidity providers benefit because they can redeem their LP tokens for a percentage of the AMM pool.” The amount a provider can withdraw is based on “the proportion of the AMM’s LP tokens they hold compared to the total number of LP tokens outstanding.”[1] Fees therefore show up as a larger pool at withdrawal time.

For XRP holders, this is the route by which XRP can earn trading fees on the ledger: deposit XRP into a pool that pairs it with another asset, and hold the LP tokens received. This page takes no view on whether anyone should; the risks are set out below and on the risks of XRP yield and wrapping. How AMM fees compare with other ways people seek a return on XRP is on earning yield on XRP, and whether a deposit is a taxable event is on XRP tax in Canada and the US.

How do XRPL AMMs differ from Uniswap-style AMMs (auction slot, fee voting)?

Three design choices set XRPL pools apart.

Fee set by vote. On the XRP Ledger, “Liquidity providers can vote to set the fee from 0% to 1%, in increments of 0.001%.” Only “the top 8 votes (by most LP tokens held) are counted.”[1] In Uniswap version 2, “every pool charges a flat 0.30% fee that is automatically added to pool reserves,” and since a governance vote in December 2025, 0.05% of that goes to the protocol rather than to providers. In versions 3 and 4, “fees are collected separately and must be manually redeemed by the position owner.” Version 3’s standard tiers are “0.05%, 0.30%, and 1%,” and in version 4 pool creators “can set any fee from 0% to 100%.”[5]

Auction slot. An XRPL provider “can bid LP Tokens to claim the auction slot to receive a discount on the trading fee for a 24-hour period.” The holder pays “a discounted trading fee equal to 1/10 (one tenth) of the normal trading fee” and can name up to four more accounts. “The LP tokens that were bid are returned to the AMM.”[1] XRPL.org’s design overview says proceeds are “partially refunded to the prior arbitrage slot holder and partially burnt, effectively reducing impermanent loss for liquidity providers.”[3]

Built into the ledger. The XRPL pools are what researchers call a “protocol-level implementation,” compared with what they call a Generic AMM-based DEX (G-AMM-DEX) on Ethereum, akin to Uniswap’s V2 AMM implementation.[4] The ledger compares them with its order books on every offer and payment.[1]

How banks and other institutions might use these pools is on Ripple’s AMM tools for institutions.

How much fee income have providers actually earned against their price exposure?

No measured answer for real XRPL pools was found. XRPL.org states both sides: “When the flow of funds between the two assets in a pool is relatively active and balanced, the fees provide a source of passive income for liquidity providers. However, when the relative price between the assets shifts, liquidity providers can take a loss on the currency risk.”[1]

The closest study is a simulation. A paper by six researchers (arXiv 2312.13749, version 4 of May 2025) compared the XRPL design with a Uniswap version 2-style pool “through agent-based simulations using real market data and multiple volatility scenarios.” It reported “improved returns due to XRPL’s lower fees and shorter block times” and said the auction mechanism “further mitigates impermanent loss by redistributing arbitrage value to Liquidity Providers.”[4] It models pools rather than measuring XRPL pool records, and its authors’ affiliations and funding, and its data window, could not be checked against a saved copy of the full text.

DefiLlama, which counts the reserves of “all AMM pools on XRPL,” showed a total of $41.59 million on September 29, 2026.[6] Its $9.66 million 24-hour figure that day is the volume of “all spot token swaps on the DEX,” not of AMM pools only.[6] CryptoSlate put the XRP/RLUSD pool at about $4.6 million on September 12, 2026.[7] Pool-by-pool figures are on how much liquidity is in XRPL AMMs.

Do the pools help XRP routing?

Some. A validator operator’s 72-hour count, reported by Coin Turk in August 2026, estimated that “31% of auto-bridged volume on XRPL DEX passes through AMM or liquidity provider pools,” and he called the figure approximate.[8] Auto-bridged trades were themselves a small share of all trades in that count, as set out on whether every payment goes through XRP.