XRP Ledger developers shipped version 3.4.0 of the xrpld server software on Sept. 16, introducing a reworked native lending protocol and a large bundle of transaction-path fixes that now move to validator voting ahead of possible mainnet activation.
The release introduces two new amendments: LendingProtocolV1_1, which revises the design of Single Asset Vaults and the Lending Protocol, and fixCleanup3_4_0, a consolidated package that hardens behavior across vaults, automated market makers, multi-purpose tokens, escrows, credential checks and permissioned trading. A third amendment, fixAMMOverflowOffer, was retired after its post-amendment behavior became a permanent part of the protocol.
Software release, not a live upgrade
The XRP Ledger Foundation was careful to stress that shipping the code does not activate either amendment on mainnet. XRPL’s amendment process requires a proposal to receive more than 80 percent support from trusted validators continuously for two weeks before its rules become binding. Ripple’s validator had already voted for the underlying SingleAssetVault and LendingProtocol proposals in August, but approval remains well below the activation threshold.
Server operators are being urged to upgrade promptly. The 3.4.0 release notes highlight performance improvements — online delete now pauses on ledger history gaps so nodes stay closer to the network tip — and, for the first time, the XRPL Foundation is distributing signed Linux packages as part of a broader supply-chain hardening push.
Closed-ended vaults change the lending model
The headline change in LendingProtocolV1_1 is a shift to closed-ended vaults with defined lifecycle phases. Under the design documented by Ripple’s open-source team, depositors can add or withdraw assets only during a subscription phase. Once the investment period begins, deposits and withdrawals stop, and the vault’s assets can be used to fund loans. A redemption window opens after the investment period ends, letting depositors recover their share once the underlying loans mature.
Once the amendment activates, XRPL’s documentation states that new loan brokers will only be attachable to closed-ended vaults. Existing loan relationships created under earlier rules receive separate handling so outstanding positions can continue to be managed without forced migration.
Cash-basis accounting replaces origination-time recognition
The second major redesign is accounting. Under the earlier model, all scheduled interest on a loan was recognized at the moment the loan originated. The V1.1 rules move new vaults to cash-basis accounting: interest counts as vault income only when borrowers actually make payments.
The change has real consequences for how vaults are valued. Unpaid future interest stays outside reported income until it arrives, which affects AssetsTotal calculations, loan debt figures and the accounting treatment of defaults. Vaults created under the previous accounting method keep that model even after V1.1 activates, meaning the ledger will run two accounting regimes side by side.
A sweeping cleanup bundle
fixCleanup3_4_0 may prove the more consequential amendment in practice. The package bundles fixes across nearly every major transaction path on the ledger: vault operations, AMM pools, multi-purpose tokens, escrow release logic, signature checking, credential verification and the permissioned trading behavior introduced to support compliance-scoped markets. Bundling the items into a single amendment is intended to avoid a long tail of piecemeal votes, but it also means validators must accept the whole set or none of it.
The lending track itself depends on two prior proposals, XLS-65 and XLS-66, which define single-asset vaults and the lending protocol’s core objects. Both remain below activation thresholds, so the V1.1 revision arrives as a refinement of proposals that have not yet gone live — an unusual but not unprecedented sequencing on XRPL, where the community frequently iterates on amendment text while earlier versions are still in voting.
Why it matters
Native lending is one of the most significant expansions of XRP Ledger functionality since the AMM amendment, moving the ledger beyond payments and issuance into credit markets. The closed-ended vault design reflects lessons from DeFi protocols elsewhere, where continuously withdrawable liquidity proved fragile during stress events. Fixed subscription and redemption windows trade flexibility for predictability — a trade institutional lenders generally prefer.
For XRP Ledger’s institutional roadmap, the cash-basis accounting change is equally telling. Recognizing income only when cash actually arrives aligns vault reporting with conservative financial reporting standards, another nod to the regulated institutions Ripple courts as RLUSD stablecoin issuance and institutional tokenization efforts grow.
The next milestone to watch is validator consensus. If support for LendingProtocolV1_1 and its dependencies climbs above 80 percent and holds for two weeks, native lending goes live on one of the longest-running production ledgers in crypto. Until then, 3.4.0 is a preview — a substantial one — of how XRP Ledger intends to compete for onchain credit flows.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
bundling escrows, credentials and AMM fixes into fixCleanup3_4_0 and one vote is risky imo. one bug and the whole package stalls the way fixAMMOverflow got retired
fixAMMOverflow got retired because it was absorbed into protocol behavior, not stalled. but yeah, escrows plus credentials plus AMM in one vote is a lot of blast radius
Closed-ended vaults with cash accounting is a real design shift. The V1 vaults had open questions about growth risk, this reads like the Foundation actually listening to the lending protocol feedback.
@validator_vik ship code is one thing, activation is another. Support is way below the 80 percent two week threshold, so this is a 2027 conversation for mainnet, maybe.
2027 might even be generous. fixCleanup touches credentials and escrows and permissioned trading in one bundle, validators will want weeks of testnet data before approving that combo
below 80 percent with ripple already voting yes just means the independent validators are the holdout, which is honestly how it should work
cash accounting for closed-ended vaults sounds boring until you remember the growth risk questions on V1. The Foundation actually answering lending feedback here, credit where due
code shipped but nothing goes live until validators hold 80% for two weeks, so temper the excitement. the closed-ended vault rework in LendingProtocolV1_1 is the right call though
temper it yes but cash accounting removes the marking headaches vault operators had with V1. if validators hold 80% for two weeks early next year this quietly becomes the lending layer xrpl people asked for
agree on the vaults. ripple voting yes back in august means activation comes eventually, just on nobody timeline in particular
closed-ended vaults with lifecycle phases kills the infinite rollover loophole, thats the part of V1 nobody wanted to talk about. good change even if activation drags into 2027
signed linux packages finally shipping from the XRPL Foundation matters more than people credit. supply chain hardening for validator infra was overdue
cash accounting for closed ended vaults is the sleeper change. no more marking imaginary rollover interest that never existed
Cash accounting plus lifecycle phases together closes the loophole properly. Marking rollover interest that never hit a wallet was the strangest design leftover from V1.
Signed Linux packages from the XRPL Foundation for the first time and almost nobody in the comments cares. Supply chain attacks are how the next big crypto loss happens, mark it.
signed builds should have been day one stuff but credit where due, most chains still ship tarballs with a checksum tweet
agreed, and its the first time the foundation distributes signed builds itself. most operators were compiling from source or trusting tarballs before this
signed packages plus the vault rework in one release and the price does nothing. classic XRPL, the tech ships years before anyone cares
agreed, and signed builds matter more with fixCleanup touching permissioned trading. a trojaned tarball during a voting window would be catastrophic
closed ended vaults with subscription windows basically turns XRPL lending into tranched fund operations. strange choice for a chain that hates complexity
subscription windows do read like fund ops, but it kills the runaway share inflation the first version had. ugly fix for a real problem
closed ended plus cash accounting together is what fixes it, v1 could mint share growth out of thin air. now if the validators would just show up and vote
signed packages for xrpl is bigger news than the lending vaults imo. a compromised rippled build during a voting window would be the worst supply chain incident in crypto history
ripple voting yes since august and validators still under 80 percent. classic. the vault rework deserves way more attention than its getting
the holdout is probably the cash accounting on closed vaults, not the fixes themselves. validators got burned voting fast on lending v1