Inside XRP Ledger’s lending plan, where the borrower posts no collateral

XRP Ledger’s proposed lending system would let a borrower receive a fixed-term loan without posting crypto collateral for the protocol to liquidate. The money would come from depositors in a shared vault, with a loan broker assessing the borrower outside the chain and able to provide first-loss capital. For a depositor, the yield would therefore depend on credit decisions as well as the software that records the loan. The November validator snapshot brought the proposed lending system closer to approval without making it live. Lending and the vault functionality it depends on still need the required support to persist through the activation period. The protocol documentation describes a model different from a familiar overcollateralized crypto loan. The borrower does not deposit a larger amount of another token for automatic liquidation.

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