The XRP Ledger's lending protocol is set to get a fix for how loan repayments are rounded. The change would make the balance after each payment match the schedule. Its activation date is still to be determined.
The XRP Ledger's lending protocol is getting a fix for how loan repayments get rounded, according to U.Today. In plain terms, the balance after each payment would match the schedule, and the update is described in an official GitHub pull request.
How the rounding change works
Under the LendingProtocolV1_2 amendment, each on-time LoanPay would bring TotalValueOutstanding down to the scheduled value with one payment fewer, capped at the rounded PeriodicPayment. After an overpayment, TotalValueOutstanding is reset to the scheduled value of the new PeriodicPayment.
Today, each payment's value part is calculated on its own, so rounding can build up across payments. As a result, the last payment can need one unit more than the rounded PeriodicPayment, and the value parts can alternate between payments.
The change uses a method called telescoping. It makes the value part of every on-time payment either the floor or the ceiling of PeriodicPayment, and at least one unit. The last payment then becomes exactly the rounded PeriodicPayment.
Little effect for XRP users and investors
The first commit moves the scheduled-value calculation out of computeLoanProperties into a separate scheduledValue function, with no behavior change. That way, LoanSet and LoanPay round it the same way.
For XRP users, there is little to no effect today, per the report. Older loans that already carried one unit above their schedule keep it, so the last payment still needs the PeriodicPayment and a single unit, unless the borrower overpays first. Small overpayments are mostly ignored, and the transaction goes through without charging extra XRP.
Activation timeline remains open
Activation requires 80% of validators to agree for two weeks in a row. No public vote for LendingProtocolV1_2 has been announced yet, so the timeline remains uncertain.
Source: U.Today
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