THE XRP LEDGER IS VOTING ON NATIVE LENDING. 🏦 Let me explain exactly what this amendment brings to the XRP ledger 👇 THE PLAYERS -Depositors pool one asset into a Single Asset Vault -A Loan Broker runs the vault and issues the loans -Borrowers receive fixed-term loans HOW A LOAN ACTUALLY WORKS 👇 1️⃣ The Broker checks the Borrower off-ledger 2️⃣ Both sign one transaction on-ledger 3️⃣ The principal moves from the vault to the Borrower 4️⃣ Repayments come in on a fixed schedule, covering interest and principal THE THREE TYPES OF INTEREST RATES A regular rate, a higher rate for late payments, and a separate rate for paying the whole loan off early. MISSED PAYMENTS A grace period kicks in first. After that, the Broker can default the loan. THE SAFETY NET The Broker can lock up first-loss capital, sized as a percentage of the debt owed to the vault. On a default, part of it moves into the vault to cover some of the loss. THE DETAIL THAT MOST PEOPLE MISS If the Broker hasn't put up enough first-loss capital, the protocol won't charge the Broker's fees. BUILT IN CONTROLS Token issuers keep their freeze and clawback powers. A frozen Borrower can't make payments, but the debt still stands. WHAT IT DOESN'T DO (YET) There's no automated on-chain collateral or liquidation in this version. It's built so features like that can be added later. Credit, written into the XRP Ledger itself. 🔐 Next up: Single Asset Vaults. @XRPLF 📗