XRP loan plan blocks withdrawals during investment period... Recovery amount depends on borrower repayment

XRP Ledger’s proposed closed-end lending vaults would block withdrawals during the investment phase and reopen them only in the repayment phase, according to the LendingProtocolV1_1 technical document. The vaults would run in three fixed stages—fundraising, investment, and repayment—with deposits and withdrawals allowed only during fundraising, both paused during investment, and withdrawals restored in repayment while new deposits and loans stop. Stage dates would be set at vault creation and cannot be changed later. Depositors’ recoveries depend on borrowers repaying, so defaults could reduce the amount returned to lenders. The design matters because it locks depositor capital for a defined term and shifts repayment risk onto vault participants. What to watch next is whether the proposal advances and how borrowers perform once the first vaults reach repayment.