The XRP lending market is developing ahead of the XRP Ledger's native lending feature launch. Ripple CTO Emeritus David Schwartz and Flare CEO Hugo Philion have engaged in a public discussion about the timing and scale of lending opportunities on the ledger.
The debate centers on a core question: should developers wait for native lending tools, or build lending infrastructure using existing ledger capabilities?
Native Lending Proposal Under Review
The XRP Ledger community is evaluating XLS-66, a proposal to enable native lending functionality that would allow users to lend and borrow assets directly on the blockchain. Validators are currently voting on the proposal. Meanwhile, XRPL Commons has announced an upcoming New York hackathon that will include lending and borrowing tracks.
Schwartz has long emphasized lending's importance in financial systems. He notes that no one has yet built lending products using the proposed native feature, leaving early developers significant opportunity.
Alternative Infrastructure Approach
Philion has argued that lending's potential may be larger than currently estimated. Rather than waiting for major XRPL upgrades, Flare plans to deploy lending logic through its own infrastructure, combining Protocol Managed Wallets with the Flare Confidential Compute stack to provide near-full smart-contract capabilities.
This approach could allow XRP holders to lend directly from native XRPL wallets without relying on cross-chain bridges, keeping assets in their native environment. Fees from the lending market would flow to the Flare ecosystem under this model.
The XRP lending opportunity is taking shape through competing approaches as developers weigh the merits of building with existing tools versus waiting for native solutions.
