The XRP Ledger is moving toward a lending structure that could let depositors control how their capital enters lending markets. XRPL validator Vet has urged validators to review the latest Le
The XRP Ledger is moving toward a lending structure that could let depositors control how their capital enters lending markets. XRPL validator Vet has urged validators to review the latest Lending Protocol changes as the network considers the amendments required to activate lending on mainnet.
Vet, explaining in his tweet, said that Lending Protocol v1.1 introduces two vault modes: open-ended and closed-ended. Open-ended vaults allow users to enter and exit at any time. Users can deposit assets such as XRP and RLUSD and withdraw their funds whenever the vault permits.
Closed-ended vaults introduce a fixed structure for the credit lifecycle. Vet explained that these vaults operate through three phases: subscription, investment, and redemption.
During the subscription phase, the vault remains open for deposits. Users can provide assets to the vault and receive shares in return. The vault then enters the investment phase, closes to new deposits, and deploys capital into loans.
The redemption phase follows the investment period. Once the vault reaches its redemption date, it reopens for withdrawals. Depositors can then redeem their shares based on the final value of the vault.
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XRP Ledger lending protocol has with v1.1 now two modes. Open ended vaults are always open, enter and leave anytime.
Closed ended vaults are the new addition, they add fixed phases to the credit lifecycle:
Phase 1) Subscription – Vault is open for deposits… https://t.co/NyTmjIhx3q
— Vet (@Vet_X0) September 30, 2026
A RippleX Developers article by Shota Natenadze provides more details about the new structure. The article explains that both vault types use the same Vault ledger object and transaction types. The main difference involves when users can move capital into and out of the vault.
The closed-ended structure also changes how interest affects the vault’s accounting. Under LendingProtocolV1_1, interest counts as income when the borrower actually makes the payment. The vault therefore records received interest rather than expected future interest.
The protocol sends interest payments back to the vault through VaultDeposit with the tfVaultDonation flag. These payments increase the vault’s total assets without creating additional shares, which increases the price per share for existing holders.
Vet also advised validators to consider LendingProtocol v1 and v1.1 together when voting on the lending framework. RippleX Developers explained that three amendments must activate for lending to go live on XRPL mainnet: LendingProtocolV1_1, LendingProtocol, and SingleAssetVault.
LendingProtocol provides the core lending functions, including loan brokers, loan origination, repayment, default handling, and first-loss capital. SingleAssetVault provides the underlying vault structure for both open-ended and closed-ended vaults.
LendingProtocolV1_1 adds closed-ended vaults and cash-basis accounting while restricting new loan brokers to closed-ended vaults.
The RippleX Developers article explains that the restriction addresses how continuous deposits and withdrawals could affect share pricing. A closed-ended structure prevents users from entering a vault midway through its lending cycle and receiving value from interest generated before their participation.
For now, XRPL’s lending framework will use closed-ended vaults for lending while open-ended vaults remain available for other purposes. Vet’s recommendation places the upcoming validator votes at the center of the process required to bring the lending functionality to mainnet.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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