Woofun AI reports that Ripple has deployed the XRPL Lending Protocol on the testnet, allowing developers to begin testing. The protocol establishes on-chain credit infrastructure for tokenized assets by standardizing execution processes such as liquidity pool management, loan issuance, and default handling, while keeping credit decisions and compliance reviews off-chain. Institutions retain responsibility for underwriting.

The system comprises the Single Asset Vault for on-chain pool management and the Lending Protocol for converting vault liquidity into loans with defined terms. These components align with XLS-65 and XLS-66 proposals, which remain pending node approval. Technically, the protocol incorporates a subordinated capital mechanism where fund pool managers absorb risk exposure prior to other liquidity providers.