XRPL native lending is about to get called “Aave for XRP” again. Read the rulebook before getting excited.
CoinDesk said today that LendingProtocol has gained 7 votes in three weeks. I just checked XRPScan: of 35 trusted validators, 22 have voted for LendingProtocol. The threshold is 80%, or 28 votes (CoinDesk says 29—a one-vote discrepancy), so it’s still 6 votes short. And it’s not a single switch: the required SingleAssetVault has 23 votes, and the accompanying patch, LendingProtocolV1_1, has 22. All three have to pass. After that, support must stay at or above 80% for two consecutive weeks. Last month, fixCleanup3_4_0 had to restart its clock because support briefly dipped below the threshold for two hours. So claims that it’s “launching any minute now” should be taken with a grain of salt.
More importantly, look at the design itself. The XLS-66 spec spells it out plainly: unsecured, fixed-term loans, with credit checks conducted off-chain by a Loan Broker. If a borrower defaults, the Broker’s own first-loss capital takes the hit first; depositors are next in line only if that capital isn’t enough. There’s no on-chain collateral and no automatic liquidation. This isn’t DeFi lending as we know it—it’s private credit bookkeeping moved onto a blockchain.
V1_1 adds another restriction: new Brokers can only be connected to closed-end Vaults. Funds come in during the subscription period, loans are made during the investment period, and the loan’s final installment plus a buffer can’t extend beyond the redemption date. In other words, once you deposit, your funds are locked up until maturity. This isn’t a liquid pool where you can deposit and withdraw whenever you want.
So what does XRP get out of this? Fee burns and reserves for ledger objects, both on a very small scale. The actual lending currency will most likely be a stablecoin like RLUSD, with institutions as borrowers and Brokers and depositors receiving the returns. This is a plus for Ripple’s institutional business. For XRP holders, though, it’s more like “people are using XRPL” than “XRP is needed”—two things that the XRP community often conflates.
I’ll be watching two numbers: when the vote count settles above 28, and what share of the Vault the first Broker’s first-loss capital makes up after launch. Don’t touch an unsecured loan with too little first-loss capital, no matter how attractive the advertised annual yield looks.
#XRP #XRPL
CoinDesk said today that LendingProtocol has gained 7 votes in three weeks. I just checked XRPScan: of 35 trusted validators, 22 have voted for LendingProtocol. The threshold is 80%, or 28 votes (CoinDesk says 29—a one-vote discrepancy), so it’s still 6 votes short. And it’s not a single switch: the required SingleAssetVault has 23 votes, and the accompanying patch, LendingProtocolV1_1, has 22. All three have to pass. After that, support must stay at or above 80% for two consecutive weeks. Last month, fixCleanup3_4_0 had to restart its clock because support briefly dipped below the threshold for two hours. So claims that it’s “launching any minute now” should be taken with a grain of salt.
More importantly, look at the design itself. The XLS-66 spec spells it out plainly: unsecured, fixed-term loans, with credit checks conducted off-chain by a Loan Broker. If a borrower defaults, the Broker’s own first-loss capital takes the hit first; depositors are next in line only if that capital isn’t enough. There’s no on-chain collateral and no automatic liquidation. This isn’t DeFi lending as we know it—it’s private credit bookkeeping moved onto a blockchain.
V1_1 adds another restriction: new Brokers can only be connected to closed-end Vaults. Funds come in during the subscription period, loans are made during the investment period, and the loan’s final installment plus a buffer can’t extend beyond the redemption date. In other words, once you deposit, your funds are locked up until maturity. This isn’t a liquid pool where you can deposit and withdraw whenever you want.
So what does XRP get out of this? Fee burns and reserves for ledger objects, both on a very small scale. The actual lending currency will most likely be a stablecoin like RLUSD, with institutions as borrowers and Brokers and depositors receiving the returns. This is a plus for Ripple’s institutional business. For XRP holders, though, it’s more like “people are using XRPL” than “XRP is needed”—two things that the XRP community often conflates.
I’ll be watching two numbers: when the vote count settles above 28, and what share of the Vault the first Broker’s first-loss capital makes up after launch. Don’t touch an unsecured loan with too little first-loss capital, no matter how attractive the advertised annual yield looks.
#XRP #XRPL