More than 400 developers registered to test the new lending architecture on the XRP Ledger during the AI & Fintech XRPL Hackathon in New York on October 24-25, 2026. Paris-based non-profit XRPL Commons granted test access to the XLS-65 and XLS-66 amendment proposals to build credit applications during the 36-hour competition. Six major institutional partners supported the event, including Ripple, XRPL Foundation, Mastercard, Amazon Web Services (AWS), Ledger, and QuickNode.
This move marks a significant technical shift: the lending protocol is designed to operate directly on the XRP Ledger base layer without requiring cross-chain bridges or separate custom smart contracts.
Deposit Mechanisms and Fixed-Term Lending
Two technical proposals form the core foundation of the lending system. The XLS-65 proposal introduces Single Asset Vaults, a mechanism that allows multiple depositors to pool a specific single asset, such as XRP or Ripple’s dollar stablecoin (RLUSD). Depositors’ ownership in the vault is represented by proportional share tokens.
The XLS-66 proposal then utilizes liquidity from XLS-65 to fund fixed-term loans. Borrowers and loan managers agree on interest rates and repayment schedules recorded directly on-ledger. Unlike conventional DeFi protocols that require overcollateralization, XLS-66 is designed for loans based on off-chain credit assessments. This architecture also incorporates a first-loss capital buffer to absorb risk if a borrower defaults.
In September 2026, the version 3.4.0 update further bolstered lending infrastructure via the LendingProtocolV1_1 amendment. These provisions govern closed-ended vaults with scheduled deposit, investment, and redemption periods, complete with a cash-basis accounting method. Odelia Torteman, Head of Digital Assets at XRPL Commons, emphasized that this technical readiness paves the way for bringing proven DeFi models to the XRPL while expanding onchain credit adoption.
Consensus Requirements and Institutional Interest
Despite large-scale testing underway in New York, these credit instruments will not automatically launch on the main network. The XLS-65 and XLS-66 proposals remain in the testing phase and require consensus approval from more than 80% of trusted validators for two consecutive weeks before becoming active on the XRPL mainnet. Ripple’s own validators officially expressed support in August 2026, but network developers are still monitoring functional stability ahead of the final vote.
Clearpool became one of the first credit protocols to announce expansion plans to the XRPL in September 2026, leveraging the XLS-65 and XLS-66 vault and lending standards backed by capital commitments from Ripple.
For crypto market participants, the arrival of uncollateralized credit at the base layer shifts the DeFi competitive landscape: the efficiency of this new system hinges on off-chain credit assessment accuracy and capital reserve resilience, rather than the value of collateral locked in smart contract code.
Reported by crypto.news.
Read also: What Is DeFi (Decentralized Finance)?
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.
