Key facts
- The XRP Ledger's LendingProtocolV1_1 amendment is now open for validator voting.
- This upgrade introduces closed-ended vaults and cash-basis accounting for XRPL lending.
- Closed-ended vaults have subscription, investment, and redemption stages, preventing mid-term entry.
- Interest is recognized as income only when payments are made, not when scheduled.
- LendingProtocolV1_1 must activate before LendingProtocol and SingleAssetVault can proceed.
The XRP Ledger's (XRPL) new LendingProtocolV1_1 amendment is now ready for validator voting, a crucial step for enabling lending functionalities on the XRPL mainnet. RippleX announced the vote on X, stating that the upgrade introduces closed-ended vaults and cash-basis accounting for XRPL lending.
Developer Shota Natenadze explained in a Sept. 30 forum post that three amendments are required for the Lending Protocol to go live on the XRPL mainnet. LendingProtocol serves as the base lending engine, handling loan origination, repayment, and default management.
The LendingProtocolV1_1 amendment adds closed-ended vaults to XRPL, which operate through subscription, investment, and redemption stages. Unlike open-ended vaults, closed-ended vaults do not allow new shares to be minted after the subscription window closes, thus avoiding potential timing issues with mid-term entry and the distribution of gains. Additionally, the amendment modifies the recognition of loan interest, ensuring it is accounted for only when payments are actually made, which is described as a more conservative and accurate accounting model. The total assets in a vault would reflect received interest rather than scheduled future interest.