Cryptocurrency expert James has highlighted what… Modified XLS-66 It is about and what it means for XRP holders in terms of earning returns. This comes as XRP Ledger validators prepare to vote on the amendment, which will introduce an institutional lending protocol.
How XRP holders can make returns by modifying XLS-66
in Share XJames pointed out that, contrary to what XRP holders might think, XLS-66 modification is not just about depositing tokens and collecting interest. Instead, it is organized, Institutional Lending Protocol Investors’ returns accumulate within a single asset vault and are only realized when they choose to redeem their deposits.
As such, the XLS-66 modification will not give XRP holders Automatic payments or dividends. Instead, they receive the MPT token, which represents the altcoin they deposited into the vault. These MPT shares grow in redemption value over time. James pointed out that the borrowers are not retail investors, but rather banks, market makers, fintech companies and payment service providers who borrow short-term working capital on neutral paths.
As such, bondholders do not lend their capital to outsiders. Instead, they participate alongside institutions in the same transparent on-chain pools. He added that the redemption cycle and deployment across multiple vaults is how to manage risk and generate periodic income without locking everything indefinitely.
How do safes work?
Pundit Bodhi also explained how the XLS-66 amendment works and how holders of these bonds can enjoy the returns from these individual asset vaults. He pointed out When borrowers repay their loans, they repay the principal and interest. The interest stays in the vault and increases the total pool XRP holdings. This results in the recovery value per MPT rising over time.
Regarding how the loans work, he explained that the associated LoanBroker accumulates XRP in the vault and makes it available for lending. LoanBroker creates fixed-term loans with terms ranging from 30 to 180 days. The loans are unsecured, meaning that borrowers do not provide any collateral on the chain. Traditional guarantors are responsible for handling off-chain credit decisions.
Fig, co-founder of Squid’s UNL validator, He said They will vote yes on the XLS-66 amendment. He noted that a strong feature of the lending protocol is that it leaves difficult aspects, such as credit assessment, out of the chain. The XRPL auditor added that this is a contemporary approach to DeFi protocol design This is gaining traction.
The figure also mentioned that DeFi protocols have in the past attempted to create autonomous systems that calculate interest rates and handle credit details through smart contracts. However, this process can often be manipulated and is more vulnerable to attacks.
At the time of writing, the price of XRP is trading at around $1.46, up more than 2% over the past 24 hours, according to Data From Coin Market Cap.
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