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A fresh development around native lending on the XRP Ledger (XRPL) is drawing strong reactions across the community.
Commentator Zach Rector is calling it “massive for XRP” as core protocol work quietly moves forward.
Rector’s comments came in response to a post from Vet, an XRPL validator, highlighting new progress on the XRP Ledger’s upcoming lending protocol.
At the center of the discussion is Ripple engineer Ed Hennis, who continues to lead development on XLS-66, a proposal that introduces native, fixed-term lending directly on the XRPL. Rector believes the update could be a major turning point for XRP.
Key Data Points
- XRPL native lending gains momentum as XLS-66 development advances quietly but meaningfully.
- Zach Rector calls the XLS-66 update “massive for XRP” as protocol work nears readiness.
- A new GitHub merge cleans up lending code, improving efficiency and maintainability.
- Native fixed-term lending could expand XRPL beyond payments into on-chain credit markets.
What Changed: Inside the Latest GitHub Update
Vet pointed to a newly merged pull request by Hennis, PR #6161, which refines the lending codebase tied to XLS-66. While the update does not change the core concept of the protocol, it significantly improves the system’s implementation.
According to the GitHub notes, the update:
- Reduces duplicated code and improves efficiency
- Fixes typos and unused variables
- Simplifies logic around loan withdrawals and balances
- Improves internal documentation and links the code more closely to the XLS-66 specification
In sum, the changes clean up the foundation of XRPL’s lending logic, making it more robust and easier to maintain as the protocol moves closer to production readiness.
Ed Hennis is cooking with the upcoming lending protocol for the XRP Ledger. pic.twitter.com/1oSXY6zyzm
— Vet (@Vet_X0) January 12, 2026
Why XLS-66 Matters for the XRP Ledger
XLS-66 seeks to enable uncollateralized, fixed-term, fixed-rate loans using pooled liquidity held in on-chain vaults. This is a major shift from most DeFi platforms, which rely heavily on overcollateralization and volatile interest rates.
The proposal builds on earlier standards and aims to expand XRPL’s role beyond payments. It allows assets like XRP and Ripple’s stablecoin, RLUSD, to be used in structured credit markets.
Key features include:
- Fixed repayment schedules with predictable interest
- Grace periods and penalties for late payments
- Early repayment and overpayment support
- First-loss capital to protect lenders from defaults
- Full on-chain transparency without custom smart contracts
RippleX: The Bigger Lending Framework
Earlier in January 2025, the RippleX team published a detailed overview of the XRPL lending framework that combines XLS-65 and XLS-66.
XLS-65 introduces Single Asset Vaults, which pool deposits from multiple users while keeping each vault limited to one asset, such as XRP or RLUSD. This design prevents risk from spreading across assets and mirrors how traditional funds operate.
XLS-66 then layers lending functionality on top of these vaults, enabling institutional-style credit issuance directly on the ledger, with underwriting handled off-chain but enforcement handled on-chain.
Why the XRP Community Is Paying Attention
For more than a decade, the XRP Ledger focused almost exclusively on payments. While this helped XRPL become fast, cheap, and reliable, it limited growth in DeFi compared to newer chains.
Native lending changes that narrative. By embedding credit directly into the protocol, XRPL seeks to evolve into an institutional finance platform, increasing XRP’s utility, liquidity, and long-term relevance.
This context explains why Zach Rector and others see the latest XLS-66 progress as more than a technical update. To many, it implies that XRP is setting itself up for a bigger role in on-chain credit markets.