XRP Ledger begins validator vote on lending protocol upgrade

The XRP Ledger has initiated validator voting on the LendingProtocolV1_1 amendment, a procedural milestone aimed at establishing native lending infrastructure. The proposal, included in the xrpld version 3.4.0 release, seeks to expand the network's lending capabilities by extending the SingleAssetVault and LendingProtocol amendments.

Key technical features of the upgrade include the introduction of closed-ended vaults and the implementation of cash-basis accounting. Closed-ended vaults would move through distinct subscription, investment, and redemption phases, with deposits and withdrawals restricted during the investment period while assets are committed to loans. Cash-basis accounting would record interest as income only when borrowers make payments, rather than at the time of loan origination.

For the amendment to activate on the mainnet, it must receive support from more than 80% of trusted validators and maintain that level of support for two consecutive weeks. If support drops to or below 80% during this period, the countdown resets. Successful activation of LendingProtocolV1_1, alongside the original LendingProtocol and SingleAssetVault amendments, is required to create an operational lending environment. The protocol is designed for fixed-term, uncollateralized loans, with risk management and underwriting handled by external participants.