Stellar upgraded to Protocol 18, adding native AMM functionality to the blockchain. This enables liquidity pools for cross-currency payments without smart contracts or high gas fees, making Stellar one of the earliest Layer 1 blockchains with protocol-native AMMs.
Stellar validators approved Protocol 18 on November 3, 2021, introducing Automated Market Maker (AMM) functionality directly into the protocol. Unlike most AMM implementations requiring smart contracts, Stellar's native AMMs enable liquidity pools without high gas fees. Cross-border payments now access the best available rates by routing through liquidity pools when beneficial. Liquidity providers earn a 0.3% transaction fee. The SDF collaborated with ecosystem developers early in the process, allowing interfaces to launch simultaneously with the protocol upgrade. This represents a novel approach to network upgrades and positions Stellar as a leader in accessible, inclusive liquidity provision.
