Codenamed XLS-66d, the creators of RippleX have announced a revolutionary idea to implement a native lending protocol.
The new proposal aims to transform the way lending occurs on the blockchain by establishing the foundation for the direct implementation of a novel lending protocol on XRP Ledger.
The plan creates procedures for loans with fixed terms and interest accrual that are pooled from group assets and don’t need on-chain security. This approach employs risk management, off-chain underwriting, and a first-loss capital protection plan to safeguard the protocol.
https://x.com/RippleXDev/status/1785751045408260600
Fundamentally, the protocol will facilitate simple lending, with conditions explicitly negotiated between the borrower and the manager assigned to oversee the lending pool. The XRPL Lending Protocol will be immediately incorporated into the consensus layer and protocol of the ledger, in contrast to typical lending methods in DeFi, which are smart contracts that operate on virtual machines.
Through the lending protocol, liquidity providers might invest XRP or other fungible tokens and earn interest by placing them in a lending pool overseen by a pool delegate.
The protocol will be developed with future development in mind, ensuring backward compatibility while allowing for a wide variety of potential upgrades that might be made.
The specification’s loan section is meant to be applied on top of another specification, creating an asset vault on the XRP Ledger with just one asset. This is meant to pave the way for future use cases like as yield farming, escrow, and more, which go beyond loans.
The protocol makes guarantee that elements like tokenized pools and pseudo-accounts may be utilised in a range of future applications by employing general ledger entries rather than ones that are only used once.
