Key Highlights
- XLS-65 and XLS-66 could bring native lending and fixed-term loans to the XRP Ledger.
- The upgrades are still in validator voting and are not active on the XRPL mainnet.
- XRPL Commons is encouraging developers to build lending tools and applications ahead of the October 24–25 hackathon.
The XRP Ledger is getting closer to having lending built directly into its network, as two proposed upgrades continue through validator voting.
The proposals, known as XLS-65 and XLS-66, are designed to bring vaults and fixed-term loans to XRPL without relying on external smart contracts. XRPL Commons mentioned the plans in a September 23 post on X while promoting its Lending and Borrowing hackathon track in New York.
How the two upgrades work
At the center of the upgrade are two connected pieces. XLS-65 would introduce Single Asset Vaults, allowing users to put the same type of asset into a shared vault. In return, users would receive shares that represent their part of the vault. The proposed vaults could support XRP, issued assets and tokenized real-world assets.
XLS-65, known as Single Asset Vaults, would build the lending part on top of those vaults. It would allow the funds inside the vaults to be used for fixed-term loans on the XRP Ledger. In simple terms, the vault would hold pooled assets, while the lending protocol would manage the on-chain loan lifecycle.
The system would split some parts of lending between the blockchain and outside participants. Credit checks and borrower assessments would happen off-chain, meaning they would not be handled directly by the XRP Ledger. However, loan creation, repayments and defaults would be recorded on-chain.
Why fixed-term loans matter
This approach is different from lending systems that depend heavily on automatic collateral liquidation. Instead, the proposed XRPL system is built around fixed-term credit. That could allow loans to have set terms for how much is borrowed, how interest is handled and when repayment is expected.
The proposed LendingProtocolV1_1 design also includes closed-ended vaults. These vaults would have set periods for when users can subscribe, invest and redeem their positions. The design uses cash-basis accounting, meaning interest would be recognized when the payment is actually received.
How loan losses could be handled
There is also room for protection against some loan losses. The proposed system can include first-loss capital from loan brokers. This capital could absorb part of a loss if a borrower fails to repay. However, the source makes clear that borrower assessment and lending risk would still depend on outside underwriters and market participants.
XRPL Commons has pointed to several possible applications developers could build around the proposed system. These include real-world-asset-backed vaults, permissioned lending pools, risk management tools and secondary markets. A secondary market could also allow the principal of a loan and its future yield to be separated before the loan reaches maturity.
When the upgrades could go live
The key point is that none of this is active on the XRPL mainnet yet. XLS-65 and XLS-66 still need enough validator support before they can be activated. XRPL amendments generally need more than 80% support from validators for two continuous weeks. As a result, the lending upgrades do not have confirmed activation dates.
XRPL Commons is also using its New York hackathon to encourage developers to start building around the proposed lending system.
The Lending and Borrowing track is scheduled for October 24–25, with the focus on tools, applications and integrations that could make use of the planned XRPL lending features.
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