The $XRP General Ledger (XRPL) is focused to establish itself as a heavyweight in decentralized finance (DeFi) with the XLS-66 proposal.
The above-mentioned proposal aims to bring indigenous lending and borrowing opportunities directly to the ledger.
If approved and activated, the change will allow users to generate returns on idle capital. This native lending protocol represents “the final DeFi frontier” for the network, according to XRPL validator and active community member Vet.
The XLS-66 lending protocol explained
Introduced in XRPL version 3.1.0, the XLS-66d specification (officially titled “Lending Protocol”) was co-authored by Ripple developers Vytautas Vito Tumas and Aanchal Malhotra.
The protocol introduces the primitives needed to generate credit in the chain. According to the GitHub proposal, the system facilitates “simple fixed-term loans without collateral, using pooled funds with predetermined terms for interest-bearing loans.”
It deliberately skips the rather sophisticated mechanisms of automated on-chain collateral and liquidation management. Instead, the protocol prioritizes flexibility, reusability, and regulatory compliance.
XRPL researcher Vet explained that lenders will not spend money blindly. The system relies heavily on off-chain acceptance and risk management. ‘The lender didn’t want to give you that $XRP primarily without knowing who you are and checking you off the chain,” Vet noted $XRP General ledger is used purely for “settlement logic largely, ownership and audit trails.”
The 80% validator hurdle
The native lending protocol has yet to go live. The amendment must achieve supermajority approval from 80% of the network’s trusted validators before a new feature can be activated. Furthermore, this threshold is expected to be maintained for two consecutive weeks. There is currently a consensus of 17.14%, with only 6 validators voting “Yes” and 29 voting “No” or abstaining.