XRPL Lending Infrastructure Advances Despite Validator Backlash

Ripple's native lending infrastructure is advancing rapidly, but it still lacks critical mass from validators. The XRPL will receive version 3.4.0 next week, introducing improvements to Lending Protocol v1.1 and Single Asset Vaults.

The update includes fixes to the first version of Lending Protocol v1.1 and ongoing work on Single Asset Vaults. However, incorporating code into the software does not automatically activate a feature on the ledger. Amendments require the support of at least 80% of validators to take effect, and both SingleAssetVault and LendingProtocol are still below that threshold.

The interdependence between Single Asset Vaults and Lending Protocol makes their activation especially relevant. Single Asset Vaults pool assets from multiple depositors and issue proportional shares, which can then feed into lending markets. Vaults can hold XRP, trust line tokens or Multi-Purpose Tokens, and private vaults allow restricting deposits to participants with verified credentials.

The institutional market is already underway, regardless of the status of the amendments. Ripple, Clearpool, and Cicada Partners are working on an institutional market based on the XLS-65 and XLS-66 architecture. Clearpool has accumulated over $930 million in institutional loans, while Cicada has underwritten more than $860 million in credit, bringing a combined track record of approximately $1.8 billion to the planned deployment on XRPL.