Key facts
- Ripple has voted in favor of amendments for the Single Asset Vault (XLS-65) and Lending Protocol (XLS-66) on the XRP Ledger.
- These amendments aim to introduce on-chain credit and lending infrastructure, supporting DeFi and tokenization.
- The Single Asset Vault allows pooling of single asset types, while the Lending Protocol enables fixed-term and uncollateralized loans.
- Both proposals require significant validator support to activate on the XRPL mainnet.
- The XRP Ledger upgrade v3.3.0 has been released, with a portion of validators already updated.
Ripple has advanced two key amendments, Single Asset Vault (XLS-65) and Lending Protocol (XLS-66), on the XRP Ledger (XRPL) following a favorable vote. These proposals are designed to introduce on-chain credit and lending infrastructure, which could significantly boost decentralized finance (DeFi) and tokenization capabilities on the blockchain.
The Single Asset Vault amendment has achieved 40% consensus votes, while the Lending Protocol amendment has garnered over 37% in favor. However, activation on the XRPL mainnet requires more than 80% of votes or support from 28 out of 35 validators for two consecutive weeks.
The Single Asset Vault will enable the pooling of a single asset type, such as XRP or other tokens, from multiple depositors, with depositors receiving proportional shares. This vault can then provide liquidity to other protocols. The Lending Protocol, funded from these vaults, will facilitate fixed-term and uncollateralized loans. While credit underwriting and compliance decisions will remain off-chain with institutions, the XRP Ledger will manage loan operations, including interest, repayments, and defaults. A first-loss capital protection scheme is included to absorb potential losses from loan defaults.
These developments come as Ripple also announced XRP Ledger upgrade 3.3.0, urging validators to update. The XLS-66 amendment recently cleared a re-audit by blockchain security firm Halborn, with all reported findings addressed. Yield protocol SOIL has announced plans to build on the XRPL Lending Protocol and Single Asset Vault once they are activated, citing use cases in lending, yield generation, and tokenized fixed-income products. Additionally, Ripple-backed Evernorth is preparing to utilize the Lending Protocol to generate institutional-grade yield on its XRP holdings.