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The XRP Ledger development team has published a second amendment, named LendingProtocolV1_1, to correct errors in the lending system code. The change was made available before any actual loans were issued and while the original amendment is still under validator voting. According to Decrypt, the fix addresses a critical bug discovered in the payment engine, a defect that had remained latent in the system for approximately 10 years before being reported.
Why it matters
The lending protocol enables the issuance of fixed-term loans. Unlike other decentralized models, these loans are not secured by on-chain collateral but are funded through pool funds. The operational model relies on off-chain underwriting and the use of so-called first-loss capital, which is capital provided by brokers to absorb initial defaults. Issuers also retain compliance tools that include the ability to freeze accounts or recover funds if necessary.
The discovery of the bug in the payment engine drew attention because it could have allowed for the minting of counterfeit XRP. The publication of the patch therefore represents a necessary technical step to ensure transaction integrity before the service becomes operational for end users. Although partially repaired by the recent change, the system has not yet been officially approved.
The numbers
To activate amendments on the network, a minimum support threshold of 80% of trusted validators is required. The period needed to complete voting and proceed with implementation is set at 2 weeks. CoinDesk reports that 10 votes are still missing to reach final approval of the lending system, as of October 19, 2026.
What remains to be understood
Despite the technical fix being published, the protocol is not yet active. The validator community must complete the voting process to confirm the implementation of the LendingProtocolV1_1 patch. Additionally, the operational implications of the off-chain underwriting model remain to be verified once the first loans are actually issued, given that risk management occurs outside the main blockchain.
This article is for informational purposes only and does not constitute financial advice or an investment recommendation.
* Content created with the assistance of artificial intelligence systems.