Ripple’s development division, “RippleX”, has disclosed a technical glitch affecting the Automated Market Maker (AMM) pool on the XRP Ledger (XRPL). The issue identified on March 22 caused a discrepancy that disrupted transactions and liquidity pools on the XRP Ledger.
In a Sunday tweet, the Ripple team disclosed that the issue lay in the DEX payment engine’s handling of liquidity routing through AMM pools and order books, particularly in intricate payment scenarios. It assured its community that the issue would soon be fixed as the “engineering team is working to resolve the issue alongside community participants.”
The team further strongly advised users to cease depositing new funds into the AMM pool and further recommended that users redeem any current LP tokens.
The glitch occurred just hours after the XLS-30 AMM went live on XRPL on March 22, introducing a unified DEX with automated market-making functionality and interconnecting order books and liquidity pools for the best price execution.
For context, AMMs are smart contracts on the XRP Ledger that supply liquidity to the decentralized exchange, enabling trading without the need for traditional order books by automatically matching buy and sell orders.
In a follow-up tweet, Ripple Chief Technology Officer (CTO) David provided more clarity on the matter, asserting that the single-sided deposit feature did not cause the technical issue. Notably, the single-sided deposit feature is an intended functionality of the AMM design that allows for a more streamlined user experience. However, it can lead to price impacts when pools have less liquidity.
In a March 23 tweet, Shwartz had even cautioned users about making the said deposits, noting, “If you make a single-sided deposit into an AMM that doesn’t have significantly more liquidity than the size of your deposit, you will take a loss in the deposit process.”
On Sunday, the pundit emphasized users’ taking further precautions, asserting, “It’s best for users to review the price impact in their tooling before submitting a transaction, and front-end apps should display this information to users.”
Meanwhile, amidst the technical glitch, XRP, Ripple’s native token, remained unscathed and has continued to register gains since Saturday. It’s worth noting that XRP has been under significant pressure due to the ongoing lawsuit between the SEC and Ripple Labs over its classification as a security.
Despite this, XRP has continued to soar, albeit slower than its counterparts in the top ten category by market capitalization, printing high lows. Over the past week, the sixth largest crypto asset soared by an impressive 7%, outperforming Bitcoin and Ethereum, which are only up 4.22% and 1.76%, respectively.
At press time, XRP was trading at $0.65, reflecting a 4.11% surge over the past 24 hours.