How to use the AMM / Liquidity Simulator
AMM / Liquidity Simulator is an educational XRPAuthority utility for comparing modeled AMM fee income with the changing asset mix and price risk of a two-asset liquidity position. It changes demonstration state only, so it cannot sign, submit, or settle a real XRP Ledger transaction. The page keeps inputs, result, data mode, and safety boundary together so the output can be checked instead of accepted as an unexplained score or promise.
The simulation allocates demo capital to an XRP and simulated RLUSD pool and varies volume, fee, and market assumptions without depositing assets. The required input is simulated capital, asset values, volume, fee rate, and scenario duration. The primary output is modeled pool exposure, fee income, and comparison data under the chosen assumptions. Defaults are examples for learning; replace them with a documented scenario and preserve the units whenever the result informs later research or planning.
What problem does this tool solve?
Displayed yield can make liquidity provision look like passive interest while hiding rebalancing, trading fees, issuer risk, and loss relative to holding. This tool solves the narrower analytical problem by naming each important input, showing the transformation, and keeping the output next to its assumptions. It does not claim to solve custody, compliance, tax, market execution, security, or business-process questions that sit outside the model.
Why people use it
Liquidity providers model scenarios to understand how pool depth, trading activity, fee settings, and relative asset prices interact before evaluating a real pool. Read the intermediate values before the headline result and change one assumption at a time. Compare a reasonable baseline with at least one adverse case, record the observation date when market or network values are involved, and follow the related research links when a field or risk is unfamiliar.
Step-by-step instructions
- 01
Open the AMM module in the DeFi Lab and identify both assets, including the issuer of any non-XRP token.
- 02
Set the allocation and baseline prices, then record the fee-rate and volume assumptions used by the scenario.
- 03
Run a neutral case before changing relative prices so fee effects and currency-risk effects remain distinguishable.
- 04
Compare the liquidity result with simply holding the assets, then test lower volume and a larger price divergence.