The XRP Ledger has spent years positioning itself as a payments-first blockchain, but its ambitions in decentralized finance have been hamstrung by a peculiar technical constraint: liquidity providers have been forced to deposit equal values of two tokens to participate in automated market makers. That requirement, standard when Uniswap first launched in 2018, has since been surpassed by more sophisticated designs on competing chains. Now, a new amendment working its way through XRPL governance could finally close the gap.
The proposed upgrade would allow single-sided liquidity deposits into XRPL's native AMM pools — a feature that Balancer pioneered and that has become table stakes for any serious DeFi ecosystem. Under the current system, a liquidity provider wanting to earn fees on XRP must also supply an equivalent dollar value of whatever paired token the pool holds. This creates friction for holders who simply want yield on their existing positions without taking on additional asset exposure.
Why single-sided matters
The mechanics sound arcane, but the practical implications are substantial. Institutional liquidity providers and treasury managers — the deep-pocketed participants that DeFi protocols desperately need — typically hold concentrated positions in specific assets. Requiring them to diversify into paired tokens just to provide liquidity introduces unwanted portfolio complexity and tax events. Ethereum's DeFi ecosystem learned this lesson years ago; the protocols that attracted the most liquidity were those that minimized friction for large depositors.
XRPL's AMM launched in 2024 and has seen modest adoption, but total value locked has lagged far behind Ethereum, Solana, and even newer entrants like Sui. The single-sided limitation has been a recurring complaint in developer forums and governance discussions. Ripple's own documentation has acknowledged the constraint as a known trade-off from the original design.
The governance gauntlet
XRPL amendments require supermajority approval from validators — specifically, 80% support sustained over a two-week period. This is a higher bar than most proof-of-stake governance systems, which has historically made XRPL conservative about protocol changes. The amendment is currently in the proposal stage, meaning validators are reviewing the technical specifications before signaling support.
The timing is notable. XRPL has been positioning itself for institutional adoption, with Ripple's ongoing efforts to build enterprise payment corridors and the recent resolution of its SEC litigation. A more competitive DeFi stack would strengthen the case that XRPL can serve as a full-featured financial infrastructure layer rather than merely a remittance rail.
Our take
This is the kind of unsexy infrastructure improvement that actually matters for long-term protocol viability. XRPL has always been technically competent but strategically cautious — a combination that served it well during the regulatory wilderness years but has left it playing catch-up on DeFi features that competitors shipped ages ago. Single-sided liquidity won't suddenly make XRPL a DeFi powerhouse, but its absence has been an unforced error. Better late than never, assuming the validators agree.
