Uncollateralized loans on the blockchain? It sounds crazy, but Ripple is getting very close to making it a reality on the XRP Ledger.
The new lending system, aimed at banks, will allow users to deposit $XRP or other tokens into a vault. Lending institutions can then use these assets WITHOUT requiring on-chain collateral.
That’s right: the loans will have NO ON-CHAIN COLLATERAL. Instead, they’ll rely entirely on off-chain credit assessments and risk management from traditional financial institutions. This is an extremely bold move, bringing TradFi risk into DeFi.
Currently, the lending protocol has 22/29 validator votes, while the vault infrastructure has received 23 votes. It needs 29 votes for two consecutive weeks to activate. A major hurdle, but not an impossible one.
If successful, this could open the door to a massive flow of money from TradFi into XRPL, but it also carries potential risks. Will the community accept bringing a “trust-based” model into a “trustless” space?
#XRP #XRPLedger
$XRP
The new lending system, aimed at banks, will allow users to deposit $XRP or other tokens into a vault. Lending institutions can then use these assets WITHOUT requiring on-chain collateral.
That’s right: the loans will have NO ON-CHAIN COLLATERAL. Instead, they’ll rely entirely on off-chain credit assessments and risk management from traditional financial institutions. This is an extremely bold move, bringing TradFi risk into DeFi.
Currently, the lending protocol has 22/29 validator votes, while the vault infrastructure has received 23 votes. It needs 29 votes for two consecutive weeks to activate. A major hurdle, but not an impossible one.
If successful, this could open the door to a massive flow of money from TradFi into XRPL, but it also carries potential risks. Will the community accept bringing a “trust-based” model into a “trustless” space?
#XRP #XRPLedger
$XRP