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Ripple CTO Demystifies Profitable Trading Strategy for Upcoming XRP Ledger Automated Market Maker (AMM)

Ripple's CTO, David Schwartz, has explained the trading strategy of Automated Market Makers (AMMs) and how they can generate profits through price volatility. He emphasized that AMMs work best when one asset in the trading pair has a fixed price while the other asset observes volatile price swings.

However, AMMs can be created between any two assets, although the mathematical properties of the trading strategy differ when both tokens exhibit volatility.

Schwartz presented a hypothetical scenario where an investor bullish on both XRP and Bitcoin (BTC) can choose an XRP/BTC AMM to benefit from the upward price movements of both assets, but he stressed the importance of balancing and rebalancing the AMM for optimal results and considering the risks involved.

XRP XRP $0.52
+0.18%
Ripple XRP
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