fig on X: "I spent the weekend testing XLS-65 and XLS-66 in devnet and found no issues in protocol implementation, design or security Squid's UNL validator will be voting yes to both proposals! Excited for these features to go live on the XRPL and start handling real loans" / X

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fig
@ecdsafu
I spent the weekend testing XLS-65 and XLS-66 in devnet and found no issues in protocol implementation, design or security Squid's UNL validator will be voting yes to both proposals! Excited for these features to go live on the XRPL and start handling real loans
4:03 PM · Apr 16, 202648.5KViews
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fig
@ecdsafu
Apr 16
Note this is not a professional code audit, but a series of real tests designed to try break the logic of the protocol I don't have a background in security or auditing, but have designed many DeFi protocols and smart contract systems
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fig
@ecdsafu
Apr 16
The tests are a series of scenarios where people are depositing to vaults, creating loans, withdrawing funds and repaying loans in various orders, timings and sizes I tried to think through many combinations and understand the maths underlying the vault and loan system Each
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fig
@ecdsafu
Apr 16
DeFi protocols often fail at the edges, like when protocol expiries overlap with block timestamps, where multiple users try to do large actions in the same block, or where users act in an ordering different to intended XLS 65 & 66 performed well in the scenarios I tried
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fig
@ecdsafu
Apr 16
A strong characteristic of the protocol is that it leaves the really difficult stuff (like credit assessment) offchain This is a contemporary approach to DeFi protocol design which is gaining more and more traction these days
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fig
@ecdsafu
Apr 16
DeFi protocols in the past have tried to create autonomous systems which compute interest rates and handle the minutiae of credit via smart contracts. This logic can often be gamed and is much more vulnerable to attack
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fig
@ecdsafu
Apr 16
In reality, credit requires some soft touch. After all, assessing the full scope of risk has nearly infinite externalities which are impossible to capture onchain through protocol or incentive design
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fig
@ecdsafu
Apr 16
XLS-66 uses the blockchain for strong auditing, global access, 24/7 availability and self custody, but keeps the soft stuff around credit offchain where it should be.
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fig
@ecdsafu
Apr 16
Ripple has a real finance business offchain which handles lending professionally. With XLS 65 & 66 they will be able to start bringing their agreements onchain, driving network activity and TVL to the XRPL. Including lending of RLUSD and XRP!
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fig
@ecdsafu
Apr 16
All tests and findings are documented here github.com/ecdsafu/xls-te…
Krippenreiter
@krippenreiter
Apr 16
Very promising to hear you're willing to vote yes. 🔥 Looking forward to projects actually trying rolling loans as well in the future. 😉

I spent the weekend testing XLS-65 and XLS-66 in devnet and found no issues in protocol implementation, design or security Squid's UNL validator will be voting yes to both proposals! Excited for these features to go live on the XRPL and start handling real loans

4:03 PM · Apr 16, 202648.5KViews