XRPL v3.1.0 Brings Onchain Lending, Validator Voting Begins

TLDR

• The XRP Ledger’s native lending feature is now part of the validator voting process following the release of XRPL v3.1.0.
• The new protocol offers fixed-rate, fixed-term credit directly on the XRP Ledger without relying on external smart contracts.
• Single Asset Vaults will isolate risk by holding only one asset type per vault, such as XRP or RLUSD.
• Validators have started voting on the XLS-66d amendment, with all initially set to the default “Nay” position.
• The update could open new funding options for institutions, market makers, and payment firms using XRP and RLUSD.

The XRP Ledger (XRPL) has officially launched its native XRP lending feature in the latest software update, XRPL v3.1.0. With this release, the XRPL network has introduced onchain lending and borrowing capabilities, allowing users to access credit using XRP, RLUSD, and other assets directly on the network. Validators have begun the voting process for the lending amendment, marking a major step toward transforming XRPL into a platform supporting capital efficiency and structured lending.

Native XRP Lending Protocol Explained

The latest XRPL update brings the long-awaited native lending protocol, XLS-66d, into the validator voting phase. This amendment enables fixed-rate, fixed-term credit directly on the XRP Ledger, eliminating the need for external smart contracts. The system relies on Single Asset Vaults, where each vault holds only one asset type like XRP or RLUSD, reducing risk and ensuring better liquidity management.

The lending protocol allows market makers, payment firms, and financial institutions to borrow assets for various financing needs. By isolating risk through these vaults and providing underwritten credit structures, XRPL aims to offer predictable, institutional-grade lending. The new system could open up new funding options for businesses and individuals by leveraging XRP assets more effectively.

XRPL Validators Begin Voting on the Lending Amendment

Following the official release of XRPL v3.1.0, validators have started voting on the amendment, which would integrate the lending protocol into the network. Currently, all validators are set to the default “Nay” position, a typical starting point in the voting process. As the vote progresses, positions may shift based on further discussions and testing by the validator community.

The addition of onchain lending to XRPL is a step toward enhancing the utility of XRP and RLUSD within the ecosystem. Institutions and users could leverage this protocol to access structured lending opportunities without relying on volatile decentralized finance (DeFi) interest rates. The network’s ability to offer underwritten credit could bring more stability and predictability to institutional financing.

Community Testing and Cross-Chain Collaboration

With the new amendment in its voting phase, the community and developers are urged to thoroughly test the protocol before it reaches full adoption. Panos Mekra, CEO of Anodos Finance, emphasized the need for incentivized testing through devnet competitions and user-friendly sandboxes. This testing will help identify any potential issues early, ensuring a smoother implementation when the protocol is fully integrated.

In addition to testing, there is potential for cross-chain opportunities, especially with networks like Flare. Users could move FXRP from Flare to the XRPL for lending in vaults, generating liquidity and yield before returning the assets to Flare for additional opportunities. Such interactions between XRPL and Flare could create productive liquidity loops, benefiting both networks and their users.

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