The XRP Ledger (XRPL) has activated the fixReducedOffersV1 amendment, which reduces the occurrence of order books blocked by reduced offers. The amendment is part of the XRPL version 1.12.0 upgrade, which also introduces other features and bug fixes.
The decentralized network that powers the XRP cryptocurrency, has activated a major upgrade that improves its decentralized exchange (DEX) functionality.
The upgrade, known as XRPL version 1.12.0, features the fixReducedOffersV1 amendment, which reduces the occurrence of order books that are blocked by reduced offers.
The fixReducedOffersV1 amendment is a protocol change that aims to improve the efficiency and liquidity of the XRPL DEX, which allows users to trade XRP and other assets issued on the ledger.
The amendment addresses a problem that occurs when an offer on the DEX is partially filled, leaving behind a reduced offer with a very small amount remaining.
This reduced offer can have a very poor exchange rate when rounded, preventing other better offers from being matched and executed.
The amendment fixes this problem by allowing the exchange rate of a reduced offer to be rounded so that it becomes better than the original offer from the taker’s point of view.
This way, the reduced offer can be consumed by other offers that match the original offer, clearing the order book and allowing more trades to happen.
The amendment was introduced as part of the XRPL version 1.12.0 upgrade, which was released in mid-September 2023.
The upgrade also includes other features and bug fixes, such as the Automated Market Maker (AMM) and Clawback amendments, which introduce new functionalities to the XRPL.
Users who operate XRPL nodes were given until September 20, 2023, to upgrade to the latest version or risk being cut off from the network.
How does the amendment activation process work?
According to the XRPL’s amendment process, a protocol change requires more than 80% support from the validators on the network for two weeks before it can be activated.
Validators are the nodes that validate transactions and vote on the state of the ledger.
Validators can signal their support for or against an amendment by including a flag in their validation messages. The fixReducedOffersV1 amendment reached the 80% threshold on November 11, 2023, and entered a two-week activation countdown period.
During this period, the amendment must maintain the 80% support to be activated. If the support drops below 80%, the countdown resets, and the amendment must start over.
As of November 25, 2023, the fixReducedOffersV1 amendment has maintained 80% support and is expected to be activated on November 26, 2023, at 00:00 UTC.
Once activated, the amendment will take effect on the next ledger close, and all nodes on the network will have to follow the new rules.
What are the implications and impact of the amendment?
The activation of the fixReducedOffersV1 amendment is expected to positively impact the XRPL DEX and its users.
By reducing the occurrence of order books that are blocked by reduced offers, the amendment will improve the efficiency and liquidity of the DEX, allowing more trades to happen at better rates.
This will also reduce the fees and delays associated with trading on the DEX, making it more attractive and competitive compared to other platforms.
The amendment will also benefit the XRPL ecosystem as a whole, as it demonstrates the network’s ability to evolve and adapt to the needs and demands of its users.
The process shows the XRPL’s decentralized and democratic governance, where validators and users can vote on protocol changes that affect the network.
The amendment also shows the XRPL’s innovation and development, as it introduces new features and bug fixes that enhance the network’s performance and functionality.
The XRPL is also witnessing other internal and external upgrades that generally boost its outlook. The emergence of the Xahau sidechain, which passed its latest security audit, spells a good omen for the future of the XRPL.
Xahau is an experimental sidechain that implements Hooks, a lightweight and efficient smart contract solution that enables developers to create decentralized applications (dApps) and smart contracts on top of the XRPL.
