Using the latest feature, XRP Ledger users can now access decentralized lending directly through their on-chain accounts, bypassing intermediaries and enjoying uncensored transactions.
XRP Ledger on-chain lending protocol introduced by Aanchal Malhotra and Vito Tumas
Yesterday, April 12, 2024, a new idea called XLS-66d or “XRP Ledger-Native Lending Protocol,” was shared on GitHub by RippleX developers. This innovative plan aims to allow the XRP Ledger blockchain to support on-chain lending and borrowing pools. In simpler terms, it’s a way to enable peer-to-peer lending directly on the XRP Ledger.
With this proposition, XRPL users will have the ability to borrow and lend digital assets among themselves, promoting financial accessibility, clarity, and productivity. Intermediaries will no longer be necessary for these transactions.
a “Pseudo-Account” and a “Single-Asset Tokenized Pool.”
The essential characteristics of prospective XRPL lending/borrowing platforms are akin to leading DeFis. Users can effortlessly put fungible tokens such as XRP, wBTC, wETH, among others, into a lending pool to accrue interest.
Later, a new breed of on-chain representatives, referred to as delegates, will take charge of managing lending pools, drawing in liquidity, and extending loans.
Native lending on XRPL to unlock wide range of use cases
In simpler terms, the innovative design allows borrowers and representatives of loan pools to negotiate and finalize loan agreements outside the blockchain system, followed by recording these agreements on the blockchain for transparency.
A “loan” will be a fresh accounting entry. It will manage the process of providing financing and repayment, as well as setting payment terms and interest rates.
RippleX, the technical development team at Ripple, emphasized the significant impact of this achievement on the XRP Ledger and the decentralized finance (DeFi) community as a whole.
The Lending Protocol allows for fixed-term loans with established interest rates. It eliminates the need for collateral through off-site underwriting, risk assessment, and a safety net fund to cover defaults. Developers can effortlessly construct and link lending apps to the XRPL using its flexible design and expandability, opening up numerous possibilities.
A representative from the XRP community, @WKahneman, pointed out that introducing native on-chart lending in XRPL has the potential to significantly enhance the value of its real-world asset sector.
As covered by U.Today previously, last week, XRPL enhanced its AMM design with a major amendment.
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2024-04-13 17:09