The XRP Ledger network is preparing to enter a new era of institutional credit. Ripple validators have recently voted in favor of two crucial amendments: XLS-65 regarding single-asset vaults and XLS-66 regarding the lending protocol. If both pass, this network will not only process payments but also become a fixed-term lending engine.
At the time of writing, XRP is trading at $1.02, down 2.2% in the last 24 hours and 5.7% over the past week. However, Ripple’s move to approve these two amendments paves the way for a new functionality that departs from the standard decentralized finance conventions. The XLS-66 lending protocol does not require borrowers to deposit excess collateral.
Credit Checks Outside, Records Inside
How can lending without excess collateral be secure? The answer lies in the combination of on-chain and off-chain systems. Borrowing institutions will still undergo credit assessments, compliance reviews, and legal reviews outside the blockchain. The XRP Ledger network then takes over the bookkeeping duties: managing loan balances, payment schedules, and recording the track record of defaults.
Meanwhile, the XLS-65 amendment allows multiple parties to pool and deposit a single type of asset - whether XRP, the RLUSD stablecoin, or other tokens on the network - into a single vault. In return, depositors receive proportional shares as asset claims. This concept immediately caught the attention of capital market players. The yield protocol SOIL plans to be one of the first applications to utilize this framework to build a lending market and fixed-income strategies. Evernorth, a Ripple-backed XRP treasury firm, also identified this new feature as an instrument for generating institutional-grade returns.
Audit Completed, But Hitting Network Approval Hurdles
From a technical security standpoint, the green light has been given. Security firm Halborn completed a re-audit of the protocol and found no critical or high-risk vulnerabilities. They submitted five findings - one medium-risk, two low-risk, and two informational notes - all of which have been accepted and resolved by Ripple. The patched medium-risk vulnerability was a technical issue where loan interest could cause the vault balance to exceed the maximum asset limit.
Along with this, Ripple released XRP Ledger version 3.3.0, which includes updates for confidential transfers, transaction grouping, and sponsored fee features.
Waiting for the 80 Percent Finish Line
However, all of these code updates cannot be enjoyed just yet. Although Ripple’s support carries significant weight, their vote alone cannot activate the amendments. To become fully operational, an amendment requires at least 28 out of 35 trusted validator votes, crossing the 80% approval threshold for two consecutive weeks. Currently, support for XLS-65 has only reached 40%, while XLS-66 stands at 37%. The finish line is still a long way off.
The final decision now rests in the hands of dozens of other independent validators. The network, which was originally designed purely for cross-border value transfers, is currently being tested on whether it is ready to assume institutional banking functions or choose to delay them further.
As reported by crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
