"The XRPL lending protocol introduces a structured lending layer built for institutions rather than retail yield chasers. Instead of pooled liquidity and floating rates common in DeFi, it supports fixed-term loans with preset repayment schedules-typically ranging from 30 to 180 days. Credit checks and risk assessments happen off-chain through established underwriting processes. Pool managers handle borrower selection, loan servicing, and first-loss protection, which absorbs early defaults before lenders take losses."
"The XLS-66d amendment embeds lending logic directly into the protocol, removing many risks tied to standalone smart contracts. The ledger itself governs borrowing terms, repayments, and authorization-a key differentiator from other DeFi approaches. Vault operators handle borrower screening off-chain, then issue fixed-term loans funded directly from the vault. Repayments flow back on schedule and distribute to depositors based on their share of the pool. Public vaults allow open participation, while private vaults restrict access through permissioned credentials-giving institutions compliance control over their institutional yield exposure."
XRPL's lending protocol creates an institutional lending layer that issues fixed-term, on-ledger loans typically spanning 30–180 days with preset repayment schedules. Underwriting and credit assessments occur off-chain through established processes while pool managers select borrowers, service loans, and provide first-loss protection to absorb early defaults. The XLS-66d amendment embeds lending logic in the ledger, enabling the ledger to govern borrowing terms, repayments, and authorization and reducing reliance on standalone smart contracts. Single-asset vaults fund loans directly, return scheduled repayments to depositors by share, and can be public or permissioned to satisfy institutional compliance. Use cases include market making, merchant payouts, and short-term working capital.
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