Key facts
- XRP Ledger is progressing towards native lending features through XLS-65 and XLS-66 amendments.
- XLS-65 would enable Single Asset Vaults for users to combine assets and receive corresponding shares.
- XLS-66 would support fixed-term loans directly on the XRP Ledger, with off-chain credit checks and on-chain loan management.
- Amendments require over 80% validator support for two continuous weeks to be activated on mainnet.
- PermissionDelegationV1_1, for limited account authority delegation, may activate on October 5th.
- Batch V1.1, for grouped transactions, is scheduled for possible activation on September 29th.
The XRP Ledger (XRPL) is on the verge of introducing native lending functionalities as two key amendments, XLS-65 and XLS-66, are currently in the validator voting process. These proposals aim to integrate vault-based liquidity and fixed-term credit directly into the XRPL, bypassing the need for external smart contracts.
XLS-65, if implemented, would allow for Single Asset Vaults, enabling users to pool single assets and receive shares representing their positions. These vaults could accommodate XRP, issued assets, and tokenized real-world assets. XLS-66 would leverage these vaults to facilitate fixed-term loans on the ledger, with credit assessments and underwriting conducted off-chain, while loan creation, repayment, and default events would be managed on-chain.
For an amendment to be activated on the XRPL mainnet, it typically requires sustained validator approval exceeding 80% for two consecutive weeks. The proposed lending system is designed with a fixed-term credit structure, distinct from the automated collateral liquidation common in many decentralized finance (DeFi) platforms, potentially catering to business lending and institutional credit products. The LendingProtocolV1_1 design includes closed-ended vaults with fixed subscription and redemption periods, and utilizes cash-basis accounting for interest recognition.
These lending advancements are progressing alongside other XRPL enhancements. The PermissionDelegationV1_1 amendment, which would allow accounts to grant limited authority to others without sharing full signing control, is slated for potential activation on October 5th. Additionally, Batch V1.1, enabling grouped transactions to settle or fail together, is scheduled for possible activation on September 29th.
At the time of reporting, XRP was trading around $1.60. However, the activation of XLS-65 and XLS-66 remains contingent on continued validator approval, and confirmed activation dates have not yet been set.