XRP Ledger developers released xrpld version 3.4.0 on Sept. 16, adding new lending features and a large set of protocol fixes. Developers are also asking server operators to upgrade to the latest version.
The release introduces two amendments: LendingProtocolV1_1 and fixCleanup3_4_0. It also retires fixAMMOverflowOffer because its updated behavior is now a permanent part of the protocol.
The software release does not mean these amendments are already active on the XRP Ledger mainnet. Under XRPL’s amendment process, a proposal needs more than 80% support from trusted validators for two continuous weeks before it can activate.
LendingProtocolV1_1 updates the Single Asset Vault and Lending Protocol systems. One major change is the introduction of closed-ended vaults with specific periods for subscriptions, investments and redemptions.
During the subscription period, users can add or withdraw assets. Once the investment period starts, deposits and withdrawals stop while the vault’s assets can be used for loans. After the investment period ends, the redemption period begins and users can recover their share after the loans mature.
The new rules would also require new loan brokers to use closed-ended vaults. Existing loan relationships created under the older system would continue to receive separate treatment.
Another major change is cash-basis accounting.
Under the previous model, scheduled interest was recognized when a loan was created. With the new system, interest would only be recognized when borrowers actually make payments.
This means unpaid future interest would not immediately count as vault income. It would affect asset totals, loan debt calculations and how defaults are handled.
Older vaults would not be converted to the new accounting model. Vaults created under the previous rules would continue using their existing accounting method.
The new lending amendment still depends on the underlying SingleAssetVault and LendingProtocol proposals. Those proposals have not yet reached the validator support needed for mainnet activation.
The second amendment, fixCleanup3_4_0, contains a wide range of fixes covering lending, vaults, automated market makers, Multi-Purpose Tokens, NFTs, escrow, permissioned trading and account authorization.
One fix changes how AMMClawback handles liquidity-provider tokens. It prevents the system from burning a holder’s tokens while recovering zero underlying assets because of MPT rounding.
Other changes strengthen MPT balance and transfer checks. Rules that previously generated logs will now be enforced under the amendment, including when transactions fail.
Single Asset Vaults also receive several precision and rounding fixes for deposits, withdrawals and clawbacks. These changes are designed to keep recorded assets, available assets and outstanding shares properly aligned when calculations reach precision limits.
Permissioned trading gets several corrections as well. The update changes how deleted domain offers are handled, tightens domain checks and improves the removal of expired credentials during OfferCreate and Payment transactions.
The release also adds a signing safeguard. Different signing hash prefixes are now used for counterparty and sponsor signatures, helping prevent a signature created for one role from being reused as another role.
Version 3.4.0 also includes lower-level server protections. Developers fixed an unbounded database search through TMGetLedger, limited the size of incoming TMTransactions lists and added a fee for transactions that cannot be properly decoded.
XRPL developers said the release includes the first phase of fixes based on MPT and DEX audit and attackathon findings. The release does not describe these fixes as evidence of an active exploit on the mainnet.
Installing version 3.4.0 does not automatically activate the new amendments. Validators still have to vote for them, and the required support must remain above 80% for two weeks.
A Sept. 17 network snapshot showed that support for the underlying lending proposals was still below that threshold. The exact numbers can change as validators update their votes.
The release also changes how Linux packages are distributed. XRPL Foundation is now hosting Debian and RPM packages through its package service and signing them with an XRPL Foundation key.
Server operators have been asked to upgrade to version 3.4.0 as soon as possible. The published packages include SHA-256 checksums that operators can use to verify the files before installation.
The latest release also retires fixAMMOverflowOffer. This does not remove the earlier fix. Instead, it removes the older pre-amendment behavior because the corrected behavior has become part of the permanent protocol.
Developer tools are also being updated alongside xrpld. Support for LendingProtocolV1_1 and the new signing changes is being added to XRPL’s JavaScript and binary-codec libraries.
Security testing of the lending system is continuing separately from validator voting. Sherlock previously said it had started an AI-based review of Lending Protocol V1.1, but no final findings from that review were identified in the material covered here.
For now, xrpld 3.4.0 gives operators the code needed to support the proposed lending changes and protocol fixes. The actual activation of the new lending rules still depends on sustained validator approval.
