XRP Ledger’s developers released XRPLD v3.4.0 on Sept. 16th, including lending amendments, transaction enhancements, and a Linux package. The software includes two amendment packages; however, both proposals do not activate on the mainnet through installation alone.
The XRPL release says the update introduces LendingProtocolV1_1 and fixCleanup3_4_0. It also retires fixAMMOverflowOffer because its post-amendment behavior is now permanently incorporated into the protocol. Operators were advised to upgrade to maintain service continuity.
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What XRP Ledger 3.4.0 Changes
LendingProtocolV1_1 is an amendment that modifies Single Asset Vaults and the upcoming Lending Protocol. The amendment incorporates closed-ended vaults with subscription, investment, and redemption windows. Every window defines the moment that funds can enter, support loans, or return to depositors.
According to the Ripple documentation, in the subscription phase, depositors can make deposits and withdrawals, but those actions cease once the investment window starts, with assets in the vault lending out. The redemption window follows the end of the investment window, with depositors withdrawing their stakes.
Another modification is in the way that newly formed loan brokers associate with vaults. Once activated, new brokers can only be associated with closed-ended vaults. Previously existing lending broker-vault association pairs are dealt with separately to be able to manage existing positions.
The new design will not enable the lending function alone. Amendments on the XRP Ledger require more than 80% of trusted validators to agree during two consecutive weeks. Installation of the software merely installs code for the amendment’s interpretation.
Why LendingProtocolV1_1 Revises Vault Accounting
LendingProtocolV1_1 is also modifying the way vaults track interest on income. Under the earlier model, scheduled interest was recorded at the time the loan was initiated. With cash basis accounting, however, the interest will be recorded only once it is received from the borrower.
This modification affects AssetsTotal, debt calculations, and the accounting treatment of defaults. Unpaid future interest is not included in vault income until the borrower makes the payment. As a result, the revised accounting method changes when loan income is recognized.
The accounting change will not be able to update the existing vaults automatically. As specified in the Ripple documentation, the old scheme will be kept by the vaults even when Lending Protocol V1_1 becomes operational.
The overall lending system is still designed using fixed-term uncollateralized loans. Loan proceeds will be coming from Single Asset Vaults, while borrower evaluation and credit risk will stay off-chain.
Who Decides Whether Amendments Activate
Validator nodes decide if sufficient support is reached for the proposed transaction rules to be enabled. In accordance with the XRP Ledger amendment process, such an approval should persist at the level exceeding 80% for two weeks. If the support level drops below 80%, the two-week period is repeated again.
The list of features currently recognized by the XRP Ledger feature code includes LendingProtocolV1_1 and fixCleanup3_4_0 and operates in DefaultNo voting mode. This configuration implies that the server will not automatically vote in favor of the feature unless its operator decides otherwise.
The corresponding amendments used for lending in the ledger did not reach the required level in the September 17 snapshot. XRPL Foundation validator history reported 16 of 35 trusted validators approving SingleAssetVault. LendingProtocol was approved by 13 out of 35 validators.
These values may fluctuate due to changes in validator voting decisions. Moreover, they represent the data collected independently from the network tracker rather than an immutable number defined in the software release.
When XRP Ledger Lending Could Reach Mainnet
No fixed activation date was announced for version 3.4.0. LendingProtocolV1_1 depends on the underlying lending protocol and voting on the amendment. Mainnet rules will be amended only if the required validator majority is maintained for the full time period.
Version 3.4.0 also comes with fixCleanup3_4_0, which is a collection of transaction fixes relating to the following areas: lending, vaults, Automated Market Maker (AMM), Multi-Purpose Token (MPT), non-fungible token (NFT), escrow, permissioned trading, sponsorship, and authorization.
The first fix relates to the AMM clawback functionality that could lead to burning liquidity-provider tokens of the holder due to MPT rounding resulting in a zero asset recovery calculation.
Vault changes improve precision in deposits, withdrawals, and clawback transactions. Other fixes include tightened permissioned trading validation, correct expiration of credentials, and improved invariant handling on deletion of domain offers.
Signature checks get enhanced too. Version 3.4.0 introduces different signature hash prefixes for counterparty and sponsor signatures. This means that a signature produced for one role will not work as a signature for another role.
According to the developers, this collection contains phase-one fixes related to MPT and DEX audits and attackathon issues. The release does not characterize these changes as a sign of exploitation of the mainnet of XRP Ledger.
Where Server and Library Updates Are Moving
The release alters the distribution channel for Linux server package releases, which are now made available through packages.xrplf.org and signed using the XRPL Foundation key. Available SHA-256 checksums allow operators to verify file integrity before installation.
Application libraries will accompany the server release. In the xrpl.js history, the unreleased sections after version 5.2.0, which was released on September 11, indicate LendingProtocolV1_1 support. Version 5.2.0 already has support for fixCleanup3_4_0 signing prefixes.
The binary-codec 2.11.0 includes the role-specific sponsor and counterparty signing prefixes. The protocol definitions in 2.11.0 are derived from xrpld 3.4.0, ensuring compatibility between application tooling and server software.
Security review efforts have been carried out independently from the validator voting process. According to the statement of August 27 by Sherlock, Ripple has initiated an AI-only security review of Lending Protocol V1.1 using its Audit Engine. No conclusive results could be found in publicly available documentation for this report.
For operators, the immediate step is upgrading server software as opposed to assuming that any lending capabilities are active. For the XRP Ledger, validator voting and its two-week majority period remain the decisive steps.
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