XRP proposed lending vaults lock deposits and expose holders to risk
Proposed XRPL V1.1 rules would require newly created loan brokers to use closed-ended vaults, locking depositor withdrawals during investment while funds may be lent to borrowers. Depositors hold transferable vault shares representing claims on repayment, but returns depend on borrower performance; loans are fixed-term, uncollateralized and underwritten off-chain. Optional broker reserves do not guarantee repayment. The amendment had 22 of 35 trusted-validator votes in a Nov. 12 snapshot, below the displayed 29-vote threshold, and must maintain more than 80% support for two weeks. Existing brokers could continue using open-ended vaults. Arf plans to move its RLUSD working-capital service to native XRPL lending after activation. Actual effects will depend on funded vaults, lending, repayments, defaults and whether shares can be sold.
