XRP Price Dips as Ripple Proposes New DeFi Lending Features

Ripple’s XRP token has experienced a steady but slightly bearish trend recently, reflecting a noticeable decrease in its value. Over the past month, the price of XRP has fallen by 21.47%, and in the last week alone, it dropped by 19.08%. As of press time, the XRP token is priced at $0.4937, which is a 4.15% reduction from its recent peak of over $0.50.

XRP/USD 24-hour Chart (Source: CoinStats)

This decline happened shortly after Ripple developers proposed a new lending protocol on the XRP Ledger. According to a report, this protocol aims to enhance Ripple’s role in the decentralized finance (DeFi) sector by allowing users to lend and borrow directly through the blockchain. Interestingly, this proposal seems to have led to a temporary dip rather than a boost in XRP’s price, marking an eleven-month low at $0.4235 just last Saturday.

Developers Propose DeFi Expansion on XRP Ledger

The recent proposal by XRP Ledger developers Aanchal Malhotra and Vito Tumas to introduce a native lending protocol represents a key stride in broadening Ripple’s DeFi capabilities. According to Ripple, this new protocol would enable direct lending and borrowing of digital assets, expanding financial inclusion, transparency, and efficiency.

1/ Today, devs @aanchalmalhotre and Vito Tumas introduced a proposal for a Native Lending Protocol on the XRP Ledger that would further expand its DeFi capabilities. Let’s break down what this means for the ecosystem 🧵

— RippleX (@RippleXDev) April 12, 2024

Although a timeline has not been announced, the protocol’s implementation could greatly impact Ripple’s blockchain ecosystem. The proposed lending protocol, detailed in the specifications XLS-64d, XLS-65d, and XLS-66d, focuses on creating tokenized pools where liquidity providers can deposit cryptocurrencies such as XRP, wrapped Bitcoin (wBTC), and wrapped Ethereum (wETH) to earn interest. These pools will be managed by delegates who attract capital and administer loans.

3/ The protocol’s modular design focuses on flexibility and reusability. It introduces three key specifications:

➡️XLS-64d – Pseudo-Account: Allows associating a single pseudo-account with multiple ledger entries for tracking balances and issuing tokens.

➡️XLS-65d – Single…

— RippleX (@RippleXDev) April 12, 2024

Key features of the protocol include fixed-term loans with pre-set conditions for accruing interest, which eliminate the need for traditional financial underwriting and risk management. This method could simplify the lending process and enhance participants’ security. The introduction of this protocol could also attract more developers to create and integrate lending decentralized applications (DApps) on the XRP Ledger.

XRP Experiences Price Fluctuations and Consolidation

XRP coin has been trading at a significant support level of $0.4390 since August 17, demonstrating strong resilience for over eight months. Despite this, the token faced a downturn on Saturday, dropping to an 11-month low of $0.4235, which momentarily breached this long-standing support.

However, the token displayed a quick recovery by Monday, rebounding near the 38.2% Fibonacci retracement level, and has since stabilized around the $0.49 support area.

XRP/USD 1-Day Chart (Source: TradingView)

The prolonged horizontal trading pattern suggests a consolidation phase, indicative of trader indecision about the future direction of XRP’s price. This phase might precede a breakout, either upwards surpassing the 61.8% Fibonacci level towards higher resistance or downwards, potentially retesting the eight and 11-month support levels if the current support fails.

Technical indicators provide further insights into market sentiment. The Moving Average Convergence Divergence (MACD) is trending downwards in the negative zone at 0.02813, signaling strong selling pressure. The increasing size of the red bars on the histogram corroborates this, indicating a possible continuation of the bearish trend in the short term.

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