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Sujit Kumar
Mar 4, 2025

Ripple’s Schwartz Explores Memecoin Liquidity Tied to XRP

Ripple’s Schwartz Explores Memecoin
David Schwartz, CTO at Ripple, recently shared insights on how liquidity flows in memecoins on the XRP Ledger (XRPL) are intricately linked to XRP’s price fluctuations. According to Schwartz, many of these tokens derive nearly all their liquidity from an Automated Market Maker (AMM) that pairs XRP with the respective memecoin.

Price Linkage and Impact

Schwartz explained that this AMM mechanism means the fiat value of these memecoins is directly affected by changes in XRP’s price. For instance, if XRP’s price increases by 5% and the exchange rate remains stable, the memecoin’s dollar value also climbs by 5%. This direct correlation ensures that as XRP moves, the liquidity and value of associated memecoins follow suit automatically.

Independent Fluctuations and Profit-Taking

While memecoins generally mirror XRP’s movements, Schwartz noted that they can still experience independent price shifts driven by factors such as community sentiment, speculative trading, or specific project developments. He warned that any rise in XRP’s price might trigger profit-taking in memecoins even if XRP holders themselves hold on to their assets. This profit-taking can add to volatility, leading to unpredictable price swings in the memecoin market.

Implications for Investors

Schwartz’s analysis underscores the inherent risk and volatility for investors holding memecoins on XRPL. He pointed out that if an investor holds a $50 position in such a token, part of its future value will depend on XRP’s price changes. For those seeking greater risk and volatility, these memecoins offer an intriguing option as they provide exposure to XRP’s movements alongside their own independent dynamics.

Ripple’s Schwartz Explores Memecoin Liquidity Tied to XRP
Sujit received his Bachelors in Science from the LNMU Darbhanga. He is currently working as a Content Strategist. He has more than three years of professional experience in information systems, security policies, technologies, and Cryptocurrency. He has published 6 books in the area of information security and assurance. He has published more than 50 research articles in leading journals Regarding the Latest and Breaking Crypto News and updates. His research interests include access control, computer forensics, Digital Marketing, Web development, business hacks, player experience, and virtual storytelling.

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