Ripple shared on Dec. 19 that a new version of the XRPL Lending Protocol is coming to the XRP Ledger (XRPL), describing what it calls a first-of-its-kind protocol-level credit system built specifically for institutional adoption.
Senior Staff Software Engineer at Ripple Ed Hennis shared on social media platform X:
The XRPL Lending Protocol is coming. A new protocol-native system for fixed-term, fixed-rate, underwritten credit.
“The upcoming XRPL Lending Protocol brings fixed-term, fixed-rate, underwritten credit directly into the XRP Ledger at the protocol level. For the first time, enterprises gain access to predictable, onchain lending designed for institutional use,” he explained.
Hennis emphasized that this approach embeds lending mechanics directly into XRPL through the XLS-66d amendment, eliminating reliance on application-layer smart contracts and fragmented integrations. He described how risk is structurally contained, writing: “With the XRPL, each loan sits inside its own Single Asset Vault (SAV): a segregated pool that holds only one asset ( XRP, RLUSD, etc.) and isolates risk to that specific credit facility.”
The protocol enforces loan terms, interest, authorization, and repayment directly at the ledger level, while pool administrators manage underwriting, servicing, and first-loss capital, creating an institutional-grade framework with onchain transparency and deterministic behavior.
Read more: Ripple’s Vision for Institutional DeFi Is Taking Shape Fast on XRP Ledger
The posts frame the development as a breakthrough moment for onchain finance at global scale. Hennis highlighted immediate high-impact use cases, including “Market makers borrowing XRP/RLUSD for inventory & arbitrage,” enabling firms to deploy liquidity across venues without locking up balance sheets. He underscored the implications for long-term holders, noting:
Custodians, exchanges, and large XRP holders can lend XRP into isolated, underwritten credit facilities to create the first scalable yield venue for XRP’s $115B+ market cap.
In another message, he stressed that “notably, XRP’s $124B market cap can finally be lent into institutional credit facilities to generate real yield instead of sitting idle.”
Looking ahead, he wrote: “The relevant amendments are expected to enter validator voting in late January, marking a major step toward activating protocol-native credit markets on XRPL.” He concluded with a sweeping assessment:
In short, this is the first time that protocol-native credit markets have become possible on a global chain. And it positions the XRPL as a settlement and credit infrastructure for real institutions.
- What is the XRPL Lending Protocol?
It is a protocol-native system that enables fixed-term, fixed-rate, underwritten credit directly on the XRP Ledger. - How does the XRPL Lending Protocol manage risk?
Each loan is isolated in its own Single Asset Vault, containing only one asset and segregating risk. - What role does the XLS-66d amendment play?
The XLS-66d amendment embeds lending mechanics at the ledger level without smart contracts. - Why is this significant for XRP holders?
It allows XRP to be lent into institutional credit facilities to generate yield instead of remaining idle.
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