XRP Ledger Introduces New Lending Protocol with Possible Liquidity Lock

The XRP Ledger Foundation released xrpld 3.4.0 on Sept. 16, introducing a new lending protocol that allows depositors to commit assets to a vault for a fixed term and wait until a set redemption date to withdraw.

This feature, known as closed-ended vaults, separates subscription, investment, and redemption periods, pausing deposits and withdrawals during the investment phase while counting interest only when paid.

The implementation permits an investment period of at least 60 seconds and strictly less than 30 years, which is the encoded ceiling. LendingProtocolV1_1 would also limit newly created loan brokers to closed-ended vaults after activation.

For XRP holders, this design introduces a possible liquidity lock that can last from minutes to decades, as deposited XRP may not be available for withdrawal until redemption.