The XRP Ledger’s version 3.4.0 release is out, introducing a Lending Protocol v1.1 amendment with closed-ended vaults and cash-basis accounting, alongside a bundle of protocol fixes — though the new features still need validator approval before they take effect on the main network.
What is in XRP Ledger 3.4.0?
According to reporting from CoinGape and TronWeekly, the 3.4.0 release was published to the XRP Ledger’s GitHub repository in mid-September 2026 and introduces two amendments: LendingProtocolV1_1 and a cleanup amendment (fixCleanup3_4_0). The release also includes server-side improvements covering validation and token checks.
How does Lending Protocol v1.1 work?
The headline change is to on-ledger lending. Lending Protocol v1.1 adds closed-ended vaults, a structure that moves through three distinct phases:
- Subscription: when assets can be deposited into the vault.
- Investment: when loans can be originated from the pooled assets.
- Redemption: when assets can be withdrawn.
The release also shifts vault accounting to a cash basis, meaning interest is recognized as income only when payments are actually made, rather than being booked at the moment a loan is originated. Reporting framed this as making the ledger’s lending primitives more suitable for institutional credit arrangements.
Are the new features live yet?
No. As CoinGape and TronWeekly noted, the amendments are not automatically active on mainnet. Under the XRP Ledger’s amendment process, changes require sustained support from more than 80% of validators over a two-week window before they activate. Until that threshold is met and held, the lending features remain dormant on the live network even though the software is released.
Why does this matter for DeFi on the XRP Ledger?
The XRP Ledger has historically focused on payments, and a native lending framework expands what can be built directly on the protocol rather than through external smart-contract platforms. Closed-ended vaults with defined subscription, investment and redemption phases resemble structures used in traditional fund and credit markets, which backers say could make the ledger more attractive for regulated and institutional lending use cases.
What else does the release fix?
Beyond lending, the fixCleanup amendment and the server-side validation and token-check improvements are aimed at core network reliability and security. These maintenance changes are typical of point releases and are intended to harden the ledger as new functionality is layered on.
Background: the XRP Ledger amendment system
The XRP Ledger uses an on-chain amendment system in which new features are shipped in node software but remain switched off until validators signal support. An amendment must hold more than 80% validator approval continuously for two weeks before it activates, a design meant to prevent contentious or under-supported changes from taking effect. This is why a release can be publicly available while its headline features are still technically inactive on mainnet.
Under that model, installing version 3.4.0 only puts the code in place; the lending features stay dormant until the vote clears. CoinGape reported that the release also carries node-operation improvements — covering gaps in ledger-history handling and peer-protocol communications — and that operators running earlier versions must update their repository configurations because packaging has migrated to the XRP Ledger Foundation’s infrastructure.
The framework also goes beyond the headline closed-ended vaults. CoinGape reported that Lending Protocol v1.1 continues to support fixed-term loans through Single Asset Vaults under the XLS-66 specification, which relies on off-chain underwriting rather than mandatory on-chain collateral, while the release improves the performance of Multi-Purpose Token freeze checks.
Why it matters
Native lending builds on the ledger’s existing tokenization primitives, including its decentralized exchange and recently added vault and token standards. The XRP Ledger has historically centered on payments, so folding on-ledger credit into the same protocol widens what can be built directly on it rather than through external smart-contract platforms.
The closed-ended vault design is notable because it mirrors how many traditional private-credit and fund structures operate, with defined windows for raising capital, deploying it and returning it to investors. Moving that model on-chain, with cash-basis accounting that recognizes interest only when it is paid, is pitched as making outcomes more transparent and auditable — which supporters argue could appeal to institutions exploring regulated DeFi, even as critics caution that uptake will hinge on real demand.
What to watch next
The decisive event is the validator vote. Because activation requires more than 80% support sustained over a two-week window, the tally in the weeks after the mid-September release will determine whether Lending Protocol v1.1 moves from released code to active functionality; if support falls short, the features simply stay switched off on mainnet. As with any new financial primitive, the subsequent test will be whether issuers and borrowers actually use the vaults once the amendment is active and whether the cash-basis accounting behaves as intended under real usage.
The update is already being tracked across the ecosystem: exchanges including KuCoin flagged version 3.4.0 and its bundled fixes when it shipped. But until the amendment threshold is met and held, the headline lending functionality remains code shipped in node software rather than a live feature on the main network — the same distinction that applies to the fixCleanup3_4_0 cleanup amendment packaged alongside it.
This article is informational only and is not investment advice. It makes no prediction about the price of XRP and should not be read as a recommendation to buy, sell or lend any asset. Feature availability depends on the validator voting process described above.
Sources
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Disclaimer: The content on this page is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
Sarah Williams is STnews's Blockchain Editor, leading coverage of blockchain technology, DeFi investigations, exchange analysis and crypto regulation. Her reporting adheres to STnews's editorial standards — primary-sourced, cited, and non-advisory.
Conflicts of interest
I hold no positions in any cryptocurrency mentioned in my coverage. All investment-related content is reviewed by senior editors before publication. I am not compensated by any project I cover.
