David Schwartz vs. Flare CEO: How Big Can XRP Ledger Lending Get?
Key Summary
XRP lending is set to launch on the XRP Ledger, with Ripple CTO Emeritus David Schwartz and Flare CEO Hugo Philion differing on its potential. Schwartz believes the native feature has room for growth, while Philion sees a bigger opportunity due to external infrastructure connections. The debate highlights the competitive lending market and its potential to unlock new utility for XRP holders.
Overview of XRP Ledger Lending
XRP lending is a native feature that allows users to lend and borrow assets directly on the blockchain. Validators are still voting on XLS-66, the proposal for this feature. XRPL Commons has announced lending is about to go live and promoted a New York hackathon with lending and borrowing tracks.
The Debate Between Schwartz and Philion
David Schwartz, Ripple CTO Emeritus, believes that no one has built anything with the feature yet, leaving early developers with plenty of room to innovate. He is interested in the issued asset scheme and lending as a new and untapped opportunity. Hugo Philion, Flare CEO, disagrees, stating that the outside infrastructure connecting to the XRP Ledger presents a bigger opportunity. Flare will deploy lending logic on its own side, using Protocol Managed Wallets and the Flare Confidential Compute stack to deliver near-full smart-contract capabilities.
Growing Demand for Lending
Evidence of demand already exists through Flare's infrastructure, with investors borrowing $7.95 million in Ripple's RLUSD stablecoin against 10.8 million wrapped XRP. This concentration of debt limits the figures but shows interest in lending before native lending activates. If XLS-66 advances, native and Flare-based markets could compete and complement each other.
Competitive Lending Market
The debate between Schwartz and Philion highlights the growing momentum for XRP holders to put the asset to work beyond payments. Lending could unlock new utility and demand in the months ahead.