- XRP has failed to record a daily close above the $0.53 resistance for five days, with the SEC’s filing against Ripple’s expert witness motion failing to influence the market.
- XRPL developers have proposed a direct lending mechanism that doesn’t rely on smart contracts; the loans would have a fixed term and accrue interest but wouldn’t need on-chain collateral.
DeFi has become a cornerstone of the crypto community, and while Ethereum remains the sector overlord, the XRP Ledger (XRPL)’s DeFi ecosystem is growing steadily. To supercharge this growth, the ecosystem’s developers have proposed a new lending mechanism that eliminates the need for smart contracts.
RippleX Developers proposed the new mechanism this week, stating that it would offer a robust, decentralized lending protocol directly on XRPL.
XLS-66d lays the foundation for a robust, decentralized lending protocol native to the #XRPLedger.
Highlights include:
✅ Simplicity & direct lending
✅ Protocol-native approach
✅ Modular & flexible designLearn more: https://t.co/UKkcX23Usu
— RippleX (@RippleXDev) May 1, 2024
Unlike existing DeFi lending protocols that rely on smart contracts, the new mechanism would allow a borrower to directly agree to the loan terms with the delegated manager of a lending pool. The protocol would be directly integrated into the XRPL’s consensus layer and protocol level.
The mechanism will introduce a single asset vault on the XRP Ledger, unlocking future use cases such as escrow and yield farming. The developers acknowledged that other needs might arise and made the protocol “upgradeable and adaptable” while maintaining its backward compatibility.
Initially, liquidity providers will contribute XRP or any other fungible token into a lending pool. Pool Delegates will be in charge of managing these pools and will earn interest. Borrowers will then submit their loan requests, and the Delegates will evaluate them based on their reputation and proposed investment strategy. They will then propose terms for the successful applicants, manage the negotiations, and, if both parties come to agreeable terms, fund the loans directly from the pools they operate.
The proposed protocol will only support fixed-term loans, with the Delegates and the borrowers settling on an interest rate beforehand.
The developers proposed three new upgrades to build the protocol: XLS-64d, XLS-65d and XLS-66d. These upgrades will introduce a pseudo-account feature, a single asset tokenized pool and a native lending protocol respectively.
The RippleX developers concluded:
The proposed XRP Ledger-native Lending Protocol represents a significant step forward in the maturation of blockchain-based financial services. By simplifying the lending process and leveraging a protocol-native approach, we are opening up new possibilities for innovation and inclusion in the DeFi space.
XRP Struggles to Hit $0.52
XRP trades at $0.5135 at press time, gaining over 4% in the past day despite a 17% drop in trading volume to $1.387 billion.
The crypto has struggled to break past local resistance at $0.52; in the past five days, it has failed to register a daily close above this level. On the lower side, $0.4868 has emerged as the token’s critical support for the past three weeks.
As Crypto News Flash reported, XRP faces resistance at $0.5310 and $0.5574, its 50% and 61.8% Fibonacci retracement levels of its decline in mid-April. In the weekly time frame, its key resistance is $0.5787.