XRP Ledger developers patch lending protocol before launch

Developers of the XRP Ledger have released a second amendment, titled LendingProtocolV1_1, to address flaws in the network’s upcoming uncollateralized lending system before its official launch.

The new protocol is designed to facilitate on-chain, fixed-term loans using pooled assets. The update introduces two primary structural changes: the implementation of closed-ended vaults that move through subscription, investment, and redemption phases, and a shift to cash-basis accounting where interest is only recorded once a borrower actually pays it.

Unlike typical DeFi models, this system is tailored for institutional borrowers and utilizes off-chain credit assessments alongside a ‘first-loss capital’ buffer to manage risk. For the protocol to activate, it must secure support from at least 80% of trusted validators. Currently, the lending-related amendments are still in the voting queue, having collected approximately 19 to 21 votes out of roughly 36 trusted validators.