XRP Ledger Bug Fixes to Be Implemented on Friday!

The proposed amendment fixCleanup3_4_0 on the XRP Ledger network, which includes a series of minor bug fixes, is set to be launched on Friday, provided that support from validators is maintained.

Meanwhile, the lending protocol of this network remains unapproved, with 10 votes short of the necessary quorum from validators.

Cleanup Amendment Approaching Activation Stage

The XRPL amendment tracker recorded 29 votes in favor of fixCleanup3_4_0 from a total of 35 trusted validators on October 19, which is sufficient to maintain the required majority.

This amendment reached this quorum on October 9, and it is expected to activate on October 23 at 09:34 UTC, provided that support remains above 80% during the 14-day voting period.

Vote counting is only conducted in Flag Ledgers, which are created approximately every 16.5 minutes; therefore, activation will begin in the first flag ledger after the 14 days have elapsed, not exactly at the moment of expiration. This tracker performs the counting through its node, but the record registered in the ledger has the final say.

The lending section is lagging behind. The lending protocol and its LendingProtocolV1_1 extension each have 19 votes, which is about 54.29%. Additionally, the single asset vault, which is a common pool from which loans are sourced, has 21 votes and requires at least 8 more votes to achieve the majority of 29 votes for approval.

The confidential transfer feature, a privacy feature for transferring multi-purpose tokens introduced by Ripple earlier this month at the XRP Seoul event, is the closest to approval with 22 votes. The transaction batching feature, also discussed at the same event, was activated on October 9.

What Will the Lending Protocol Do?

As explained in the lending protocol documentation, loans are fixed-term and unsecured. These loans are funded by depositors through a single vault managed by brokers, and borrowers repay them according to the specified terms. Credit checks are performed off-chain, and the current version does not include automatic collateral management and liquidation on-chain.

Some brokers may place first-loss capital as a protective shield to absorb defaults before touching depositor funds; however, the documentation states that this does not eliminate credit risk. The practical example provided illustrates the limitation of this method: in the case of a default on 1,090 tokens, only 10.9 tokens are returned, as payments are limited to 10% of the minimum coverage (which itself is 10% of the total debt). As a result, the vault incurs a loss of 1,079.1 tokens.

Failure to make installment payments triggers a grace period, after which the broker can declare the loan to be in default. A broker expecting that a borrower will not make their installment payment can mark the loan as impaired; this action advances the next due date to declare default sooner, while paying the debt before that date clears this mark.

Token issuers other than XRP can only claw back first-loss capital up to the minimum required level and can also freeze accounts. A frozen borrower cannot repay the loan but remains indebted and will ultimately default. Brokers also set fees, but if the financial coverage falls below the minimum threshold, no fees are charged.

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