Ripple CTO Delighted as Devs Propose Game-Changing Native Lending Protocol for XRPL

• RippleX developers introduce a Native Lending Protocol for the XRP Ledger.
• The protocol enables direct borrowing and lending of digital assets on XRPL.
• Ripple CTO expresses excitement over the proposal, highlighting its potential to enhance the XRP ecosystem.

The XRP Ledger (XRPL) is set to welcome more DeFi capabilities as RippleX developers Aanchal Malhotra and Vito Tumas have proposed a Native Lending Protocol on XRPL.  RippleX called attention to this development in a recent post on X. 

Notably, this proposed protocol seeks to enable direct borrowing and lending of digital assets on XRPL. The report noted that the system promises to enhance financial inclusivity, transparency, and efficiency by eliminating unnecessary intermediaries.

The proposal features a modular design that promotes flexibility and reusability, with three key specifications: XLS-64d, XLS-65d, and XLS-66d.

XLS-64d introduces the concept of a Pseudo-Account. This specification allows a single account to manage multiple ledger entries for tracking balances and issuing tokens. On the other hand, XLS-65d creates a new ‘Pool’ ledger entry explicitly designed for single tokenized asset pools.

Meanwhile, XLS-66d builds on the XLS-65d specification. In particular, XLS-66d transforms lending processes by incorporating off-chain underwriting, on-chain agreements, and thorough loan management.

Furthermore, the proposed XRPL DeFi capability empowers liquidity providers to deposit fungible tokens such as XRP, wBTC, and wETH into lending pools to earn interest.

Secondly, it enables Pool Delegates to manage Lending Pools, attract capital, and facilitate loans. Thirdly, borrowers can engage in off-chain negotiation of loan terms with Pool Delegates and record agreements on-chain.

Additionally, the protocol facilitates fixed-term loans with pre-set interest terms, eliminating the need for collateral through risk management strategies. Furthermore, Pool Delegates provide first-loss capital to shield Liquidity Providers against defaults. 

Ripple CTO David Schwartz has expressed excitement about the XRP Ledger Native Lending Protocol proposal, emphasizing its potential to introduce new utility to XRP. He believes that, if passed, it could significantly enhance the XRP ecosystem. 

Schwartz highlighted that, alongside the native DEX, this lending protocol is pivotal in enabling more accessible, efficient, and transparent financial services.