Ripple has announced the development of a new XRPL Lending Protocol, designed to enable XRP holders to earn institutional-grade yields through on-ledger lending. The protocol, detailed by Ripple Engineer Edward Hennis, is set to launch as part of XRPL Version 3.0.0 and is expected to enter validator voting by late January 2026.
The core mechanism of the protocol involves the use of Single Asset Vaults (SAVs), which isolate risks for specific assets like XRP and RLUSD to facilitate safer lending. This structure provides a framework for market makers and fintech companies to access liquidity, thereby enhancing the utility of both tokens within the DeFi ecosystem.
Hennis emphasized that the protocol "will unlock productive on-ledger lending for institutions and create a pathway for XRP holders to earn institutional-grade yield." The initiative aligns with Ripple's broader strategy to integrate traditional finance with blockchain technology, focusing on compliance with standards like KYC and AML for regulated DeFi operations.
To ensure security, Ripple has partnered with Immunefi for a $200,000 attackathon to identify potential vulnerabilities in the protocol before launch. The development could significantly boost XRP's utility in financial services, potentially influencing its market position as institutions explore new lending and liquidity management tools on the XRP Ledger.
