Ripple X Dev Introduces Proposal for Native Lending Protocol on XRPL
Ripple X Dev made an exciting announcement on X, revealing that the long-awaited proposal for the Native Lending Protocol on the XRP Ledger is finally open for public review and feedback. This development has garnered enthusiasm from Joel Katz, Ripple’s Chief Technology Officer, who believes that this proposal has the potential to revolutionize the utility of the XRPL.
The proposal, introduced by developers Aanchal Malhotre and Vito Tumas, aims to enhance the De-Fi capabilities of the XRPL. It promises to promote financial inclusivity and transparency within the Ripple ecosystem by allowing users to borrow and lend digital assets directly on the XRP Ledger, eliminating the need for unnecessary intermediaries.
A notable feature of this protocol is its modular design, which emphasizes flexibility and reusability to accommodate various use cases within the ecosystem. The developers have introduced three key specifications to describe the protocol’s modular design: XLS-64d for pseudo-Accounts, XLS-65d for a Single Asset Tokenized Pool, and XLS-66d for a native XRP Ledger Lending Protocol.
To provide a clearer understanding of these specifications, XLS-64d enables the association of a single pseudo-account with multiple ledger entries for efficient balance tracking and token issuance. XLS-65d defines a new ledger entry for a single tokenized asset pool, enhancing liquidity management. Lastly, XLS-66d leverages the aforementioned specifications to facilitate liquidity provider asset management, incorporating off-chain underwriting, on-chain agreements, and loan management.
However, these specifications are not the only special features of the Native Lending Protocol. It also offers other key features that optimize user experience and risk management. For example, liquidity providers can deposit fungible tokens into a Lending Pool to earn interest. Pool Delegates manage Lending Pools, attracting capital and providing loans. Borrowers and Pool Delegates negotiate loan terms off-chain, recording them on-chain for transparency. Additionally, fixed-term loans with pre-set interest terms are facilitated, bypassing the need for collateral through innovative risk management mechanisms.
The XRPL Native Lending Protocol is designed to empower both developers and users. It provides a conducive environment for building and integrating lending decentralized applications (dApps) on the XRPL, opening up opportunities for creating innovative financial solutions and driving adoption within the ecosystem.
Joel Katz, Ripple’s Chief Technology Officer, expressed his excitement about the XRP Ledger Native Lending Protocol’s potential utility. In a tweet, he stated his enthusiasm for the proposal and its potential to bring new utility to the XRPL. Katz believes that together with the native DEX, this lending protocol forms a critical pillar in enabling more accessible, efficient, and transparent financial services.
The XRP Ledger Native Lending Protocol proposal represents a significant step forward in unlocking new financial opportunities and enhancing the utility of the XRPL. With the support of Ripple’s Chief Technology Officer and the broader developer community, this initiative has the potential to transform Ripple’s ecosystem and boost the value of the XRP token.