A proposal presented by Ripple‘s development team, led by Aanchal Malhotra and Vito Tumas, aims to significantly improve the XRP Ledger (XRPL) through a new innovation called Native Lending Protocol. This groundbreaking initiative could transform decentralized finance (DeFi) within the XRPL ecosystem, making it more efficient and effective.
Ripple Announces Native Lending Protocol Proposal For XRPL
The suggested XRPL protocol brings an advanced system for peer-to-peer digital asset transactions. By eliminating intermediaries, it promotes financial inclusion, transparency, and efficiency. Additionally, Ripple CTO David Schwartz has expressed his excitement about this proposal in a recent post.
Another way of expressing this idea is: He stressed the potential value of the proposal for the XRP Ledger Native Lending Protocol, stating, “I’m looking forward to the discussion on this proposal for the XRP Ledger. If approved, it would significantly expand the functionality of the XRPL with the addition of a native lending system. In combination with the existing native Decentralized Exchange (DEX), these developments will enhance accessibility, efficiency, and transparency in financial services.”
The Native Lending Protocol is built with three essential features that prioritize customizability, adaptability, and the ability to be used again:
- XLS-64d – Pseudo-Account: Enables associating a single pseudo-account with multiple ledger entries for tracking balances and issuing tokens.
XLS-65d – Single Asset Tokenized Pool: Defines a new ledger entry for a single tokenized asset pool, enhancing asset management capabilities.
XLS-66d – Native XRPL Lending Protocol: Utilizes the aforementioned specifications to manage Liquidity Provider assets, introduce off-chain underwriting, on-chain agreements, and streamline loan management processes.
Features & Use Cases For Developers
Key features of the protocol include:
- Liquidity Providers depositing fungible tokens into Lending Pools to earn interest.
- Pool Delegates managing Lending Pools, attracting capital, and providing loans.
- Borrowers and Pool Delegates agreeing on loan terms off-chain, then recording them on-chain.
Additionally, Ripple noted that the protocol allows for short-term loans with established interest rates for interest-bearing loans. This eliminates the requirement for collateral through advanced risk management techniques.
In addition, the Native Lending Protocol’s arrival on XRPL will significantly boost its Decentralized Finance (DeFi) potential. This innovation opens up numerous possibilities for developers, allowing them to build and incorporate various lending applications (dApps). The protocol’s flexible design ensures that these dApps can easily be developed and integrated, fostering the expansion and inclusivity of the ecosystem.
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2024-04-13 11:07