The protocol has two parts. A Single Asset Vault pools a single asset and the lending layer turns the pooled money into loans with fixed terms. Both are still proposals, defined in technical drafts known as XLS-65 and XLS-66, and remain subject to approval by the validators running the network. The features are available for testing on a development network, but are not live.
The use Ripple leads with is short-term financing. A payments company holding reserves in RLUSD, its US dollar-pegged stablecoin, may need cash to fund outgoing payments before a cross-border settlement clears two days later.
Instead of drawing on a bank line of credit or selling assets, it could borrow against the incoming settlement through an approved pool, with repayment automatically enforced.
This is separate from XRP, the token the network is best known for, and from RLUSD, which is one of the assets such a system could lend against. It is infrastructure aimed at institutions rather than a product that retail users would touch directly.
However, Ripple is also entering a crowded field. Onchain lending is already running at scale through protocols such as Aave, Compound, Maple and Clearpool, which together have billions in deposits.
However, Ripple says these systems were built around crypto-native governance, where a protocol can change its risk rules through community votes, which it says institutions cannot guarantee in advance. Its counter is to fix the lending mechanics at the base layer of the network so that the behavior does not change under a lender while keeping the network public rather than delimiting it to a closed group as some approved systems do.
