Quiz: Trust Lines and Peer-to-Peer Credit 4 questions · 80% to pass 1. The bank spread refers to:The physical distance between bank branchesThe difference between what banks pay depositors and what they charge borrowersThe number of products a bank offersThe time it takes to process a loan applicationThe bank spread is the gap between deposit rates (~0.5%) and lending rates (10-27%). This spread, often 9.5% or more, is the bank's revenue from credit intermediation.2. How do XRPL trust lines differ from Ethereum ERC-20 token transfers?Trust lines are fasterTrust lines require the holder to explicitly opt in before receiving tokensTrust lines cost more to createTrust lines only work with XRP, not issued tokensTrust lines are bilateral agreements. The holder must create a trust line to the issuer, specifying a maximum amount, before receiving any tokens. ERC-20 tokens can be sent to any address without the recipient's consent.3. XLS-66 adds which capability to XRPL trust lines?Faster transaction speedsFormal lending structures with fixed terms and risk isolationAnonymous transactionsCross-chain token transfersXLS-66 introduces formal lending on XRPL: fixed-term loans with defined repayment schedules, SingleAssetVault for risk isolation, and protocol-level interest accrual and enforcement.4. When the intermediary is removed from credit, what happens to the spread?It increases because there's more riskIt stays the same because rates are regulatedIt approaches zero because both lender and borrower get better termsIt disappears entirely and lending becomes freeWithout the bank in the middle, lenders earn 6-8% instead of 0.5% on deposits, and borrowers pay 6-8% instead of 10-27%. Both sides benefit. The spread collapses toward zero. Check answers Retake quiz Back to lesson Next lesson →