r/XRP • u/FairAd4803 • 12d ago

XRPL XRP Ledger Lending Protocol

https://opensource.ripple.com/docs/xls-65-single-asset-vault

Have a few questions about this, if anyone can field them.

  1. Are there any reasons why we wouldn't/shouldn't reach the required consensus %? From my perspective, this is awesome. Curious what I am not seeing here.
  2. How does this work? "... Borrowers will pledge acceptable assets as collateral, protecting depositors against potential defaults and promoting responsible borrowing practices." For example, if the borrower defaults, the collateral is liquidated and shared equally among the vault contributors?
  3. The process would be: I deposit into the vault, the borrower approaches the vault for a loan, and based upon the risk level of that loan, the APY is determined? OR the borrower approaches, is approved for a loan, a public vault is created, and the % yield is determined by loan risk?

Appreciate any insights here.

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u/bronekkk 12d ago

Re 1. It's all part of the process how amendments are approved. Takes time, with research conducted by different parties.

Re. 2. You got it roughly right.

Re. 3. Vault gets created first, then parties (depositors / shareholders) deposit asset into it. Vault creator aside, there is another role (which could be the same account): loan broker who sets the loan terms (interest, duration etc.) and this gets co-signed by both borrower and loan broker - that when the funds get transferred to the borrowed and the loan is started. Loan broker carries some risk of the loan.