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[🧵] A word of caution for everyone as we approach the activation of AMM on the XRPL-mainnet. Many people confuse liquidity provisioning for "staking" and believe that XRP would be "locked up" in a way that prevents XRP from being interacted with. 👇 That is wrong and will have serious effects on your bag if you start to engage in this way with any AMM-pool. 🔸 FLARE STAKING🔸 Using Flare as an example, you would typically want to wrap all or most of your coins to delegate WFLR in the FTSO system and receive compounding WFLR for being an active player in the ecosystem. The risk is low, and most of the technical complexity has already been greatly abstracted thanks to many awesome web interfaces. There is also actual "staking" in the sense that it requires a "minimum lockup period" for your stake to be delegated to any validator of your liking. 🔸 XRPL AMM 🔸 There is no lock-up period with the XRPL-AMM, and your deposited coins are provided to the AMM-"robot", which may then offer markets to any trader at any time for the current price determined by an algorithm. The entire idea of the AMM is to automatically make markets, which means that your deposited coins will be traded automatically depending on all transactions that take place. 🔸 SUMMARY 🔸 • Your deposits are not "locked" but "provided" to the AMM-pool you pick. • Traders & Arbitrageurs will have access to such pools, and the software will provide liquidity (yours included) at a specified calculated price. • Your XRPs are not wrapped before or after depositing into a pool. • The source of the profit varies (inflation vs. earned fees/token burn/market making). ⚠️ Depositing your whole bag of XRP in a single transaction (single-sided provisioning) would most certainly imbalance the asset-pair ratio of the pool you join, resulting in high fees and a significant impermanent loss from the start. 👉 Before getting involved in the AMM craze, be cautious and careful, and, as evil as it sounds, learn from the mistakes of others.