XRP enthusiasts and developers are exploring the possibility of introducing native staking and lending functionalities on the XRP Ledger (XRPL). While the XRPL has been around for over a decade, it currently lacks these features, forcing XRP holders to rely on third-party platforms for earning yields. However, key players in the XRP ecosystem are now contributing to the conversation and proposing potential solutions.
One community figure, known as Mickle, recently proposed the idea of XRP staking and challenged someone to make it a reality. As an example, he pointed to Babylon Labs, a Bitcoin staking protocol that enables Bitcoin holders to earn yields without relying on third-party trust or bridging assets to other chains.
In response to Mickle’s challenge, Hugo Philion, the CEO of Flare Networks, mentioned that his team is actively working on developing the necessary tools for staking on the XRPL. Philion revealed that Flare is building staking mechanisms using Flare XRP (FXRP) and leveraging the Flare Data Connector (FDC) for services provided by staked nodes and service providers, like relaying oracle data between Flare and XRPL.
Another XRPL validator named Vet presented the XLS-65 and XLS-66 protocols, which aim to bring native yield farming to the XRPL. These proposals will undergo rigorous testing soon, and a devnet release is expected to allow developers to explore their capabilities.
The XLS-65 proposal introduces the “Single Asset Vault,” an on-chain mechanism that combines assets from multiple depositors and makes them available for other on-chain protocols. This vault system facilitates lending, yield generation, and asset management, decoupling liquidity provision from specific protocol logic. The XLS-66 protocol focuses on decentralized lending, enabling users to offer and receive loans on the XRPL without intermediaries like banks. It simplifies lending with uncollateralized fixed-term loans and relies on off-chain mechanisms for credit risk assessment. Interestingly, XLS-66 utilizes the asset vaults defined in XLS-65 to pool depositor funds and facilitate lending.
Both the XLS-65 and XLS-66 proposals were authored by Vytautas Vito Tumas, a software engineer at Ripple, and Aanchal Malhotra, the Head of Research at RippleX, demonstrating Ripple’s active involvement in advancing native yield and lending functionalities on the XRPL. The proposals were submitted simultaneously in April.