Key points

  • XRPL's reference server version 3.4.0 introduces LendingProtocolV1_1 and fixCleanup3_4_0 for amendment voting.
  • The lending proposal separates vaults into subscription, investment and redemption phases and recognizes interest when paid.
  • Installing the release does not activate the new rules; validator approval is still required before they take effect on the ledger.

The XRP Ledger Foundation has released version 3.4.0 of xrpld, the network's reference server software, adding code for closed-ended lending vaults and a broad package of protocol fixes. The September 16 release gives server operators the software needed to evaluate and support the proposed rules, but it does not by itself switch them on across the public ledger.

A defined lifecycle for lending vaults

The main product change is LendingProtocolV1_1, which extends the proposed Single Asset Vault and Lending Protocol features. Closed-ended vaults would move through three phases: subscription, investment and redemption. Depositors can add or withdraw assets during subscription. During the investment period, deposits and withdrawals stop while the pooled assets can fund loans. Redemption begins after that period, allowing participants to reclaim their share once the relevant loan obligations are settled.

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Cash-basis accounting changes timing

The amendment also changes when a vault records lending income. Under the earlier design, scheduled interest could be recognized when a loan originated. Cash-basis accounting instead recognizes interest only when a borrower actually pays it. That distinction is important for depositors and operators because unpaid future interest would no longer appear as realized vault income. XRPL's documentation says vaults created under the previous accounting model would retain it rather than being converted retroactively.

Release does not mean activation

Version 3.4.0 packages the proposed behavior, while XRPL's amendment system keeps activation separate from a software upgrade. Validators must support an amendment at the required threshold for the required period before the rules become effective. Independent reports published September 18 said the underlying vault and lending components were still below activation levels. No source reviewed for this report showed a live mainnet loan using LendingProtocolV1_1 or a scheduled activation date.

Protocol cleanup reaches beyond lending

A second amendment, fixCleanup3_4_0, groups corrections across vaults, automated market makers, Multi-Purpose Tokens, escrow, permissioned trading and transaction signing. The release notes include tighter rounding and invariant checks, distinct hash prefixes for counterparty and sponsor signatures, and safeguards for edge cases in AMM clawbacks. The package also addresses lower-level node behavior, including limits on incoming transaction lists and a previously unbounded database seek.

What operators and users should watch

The foundation asked server operators to upgrade promptly for service continuity and moved signed Linux packages to its own distribution domain. Operators still need to make an independent decision about amendment voting; installing the binary is not the same as voting yes. For prospective lenders and borrowers, the practical questions remain whether validators activate the underlying architecture, which assets and intermediaries support it, and how off-chain underwriting and credit-risk controls are applied.

Why the design matters

Closed-ended structures trade liquidity for predictability. Fixed subscription and redemption windows can help match pooled funding to fixed-term loans, but depositors may be unable to withdraw during the investment phase. Cash-basis accounting provides a more conservative view of income by excluding interest that has not been collected. The design could give institutions clearer dates for committing and returning capital, while concentrating liquidity and credit risk within a defined term. Its usefulness will depend on implementation details, asset support and borrower assessment outside the ledger. Until the amendments pass network governance and production implementations emerge, however, version 3.4.0 is best understood as a technical and governance milestone rather than a launched lending market.

Sources

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