Ripple’s Bank-Style Lending on XRPL Nears Launch: What XRP Holders Actually Get
Ripple's bank-style lending protocol on the XRP Ledger (XRPL) has secured 22 of 35 validator votes (62.86%), nearing its required threshold for activation.
The LendingProtocolV1_1 amendment on the XRP Ledger (XRPL) has collected 22 of 35 votes (62.86%) from validators. Three more validators have signed on over the past three weeks, with Ripple's own nodes already voting yes, along with the University of Waterloo and UC Berkeley.
To go live, the amendment must clear the 80% threshold (29 votes) and maintain it for two consecutive weeks. The related SingleAssetVault amendment (XLS-65) has 23 votes (65.7%) and needs six more to pass.
Bank-Style Credit on Blockchain
The XLS-65 and XLS-66 standards eliminate overcollateralization and instant liquidations, allowing companies to take fixed-term, uncollateralized loans directly on XRPL. These loans operate similarly to traditional bank credit with fixed terms and pre-set interest rates.
The protocol relies on off-chain underwriting and risk management to assess the creditworthiness of borrowers.
How XRP Holders Benefit
XRP holders will gain a new way to earn passive income by depositing XRP or stablecoins like RLUSD into Single Asset Vaults and receiving shares. Interest is paid on a cash basis after borrowers repay their loans.
However, if a major borrower defaults and the broker's first-loss capital is exhausted, depositors bear losses and their shares decrease in value. Ripple has already tested the protocol on a private XRPL network with nine nodes matching mainnet specifications.
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