Cryptocurrency

Ripple Proposes Native Lending Protocol to Expand XRP Earning Opportunities

Ripple, the company behind the XRP Ledger (XRPL), is introducing avenues for XRP holders to earn directly on the blockchain. A recent proposal from RippleX developers Aanchal Malhotra and Vytautas Vito Tumas introduces a native lending protocol designated as XLS – 66d.

Enhanced DeFi Capabilities

The proposed protocol expands the XRPL’s decentralized finance (DeFi) offerings by allowing peer-to-peer lending and borrowing of cryptocurrencies, removing the need for centralized intermediaries. The system will offer fixed-term loans using pooled funds, with interest rates determined in advance.

Read Also: Bitstamp Launches Lending Product for XRP Holders: Details

Unlike in traditional financial institutions where collateral is needed before a loan is issued, the protocol will bypass this requirement and instead focus on off-chain processes for underwriting and managing risk.

How it Works

The protocol enables users to deposit XRP or other supported tokens into designated lending pools to earn interest. Borrowers can then negotiate loan terms directly with a pool delegate who oversees the pool’s operations. The design supports lending pools where a single borrower can access funds from multiple lenders.

Flexibility and Reusability are Central

RippleX developers prioritize flexibility and reusability in the lending protocol design. This focus is evident in the system’s upgradeability, allowing for future enhancements, and in the creation of reusable objects that other XRPL protocols can leverage.

Protocol Specifications

The lending protocol comprises three specifications:

XLS-64d: Facilitates associating a pseudo-account with multiple ledger entries, essential for balance tracking and token issuance.

XLS-65d (“Single Asset Tokenized Pool”): Introduces a ‘Pool’ ledger entry for managing a tokenized asset pool, allowing efficient interaction with minimal ledger records.

XLS-66d: This specification outlines the core lending mechanism, building upon XLS-65d for liquidity provider asset management.

CTO Enthusiastic About Potential

Ripple CTO, David Schwartz, reacting to the proposal expressed positive sentiments about the proposed lending protocol. Schwartz views the potential adoption as a significant value-add for the XRP Ledger, suggesting new opportunities and growth prospects for the ecosystem.

David Schwartz noted:

“Very excited to see the XRP Ledger Native Lending Protocol proposal up for review and feedback – if passed, this could bring new utility to the XRPL. Together with the native DEX, this lending protocol forms a critical pillar in enabling more accessible, efficient, and transparent financial services.”

Read Also: Crypto Miners Can Now Pay Electricity Bills With XRP and Shiba Inu (SHIB) 

Bitrue Ambassador, XRPcryptowolf, echoed the CTO’s view, in his words “The XRP Ledger needs DeFi more than ever. That’s how it will bring millions of users to actually use the XRPL”

Building on Recent XRPL Advancements

This lending protocol announcement follows the recent implementation of automated market maker  (AMM) functions on the XRPL. AMMs enable XRP holders to act as liquidity providers and earn passive income. Enthusiasts rapidly provided over 1.8 million XRP to liquidity pools following an amendment enabling this new feature.


Follow us on Twitter, Facebook, Telegram, and Google News

Solomon Odunayo

Solomon is a trader, crypto enthusiast, and analyst with over four years of experience in the industry. He strongly believes that crypto assets and the blockchain will continue to gain prominence. At TimesTabloid.com, he focuses on news, articles with deep analysis of blockchain projects, and technical analysis of crypto trading pairs.

Recent Posts

Stern Critic Says XRP Is Ready to Run

XRP, a digital asset often criticized for its lackluster price movements, has recently demonstrated remarkable…

50 minutes ago

Standard Chartered Says $10000 for Ethereum (ETH) is Inevitable, Where Will Solana (SOL) and Rexas Finance (RXS) Be then?

Standard Chartered's bold prediction of Ethereum (ETH) reaching $10,000 has set a bullish tone for…

6 hours ago

Ethereum, XRP, and XYZVerse: The Whale Favorites Driving the Crypto Market Right Now!

Major cryptocurrencies are capturing significant attention as influential investors shift focus toward assets with promising…

8 hours ago

Ready for Explosive Gains? These 5 Altcoins Could Deliver 4500% Portfolio Growth in Weeks!

Cryptocurrency investors are on the hunt for digital assets that can deliver exponential returns in…

9 hours ago

Trump’s Victory Sparks Crypto Chaos: $XYZ Meme Coin Ready to Smash 99,900% Gains

BOOM! The Trump administration just smashed open the gates for the crypto bull run of…

10 hours ago