Flare Networks CEO Hugo Philion says Ripple CTO David Schwartz is underestimating how much lending demand the XRP Ledger can support. Investors have already borrowed $7.2 million in RLUSD against wrapped XRP through Flare's infrastructure, which Philion cites as proof the market exists before Ripple's own lending protocol goes live.
Flare CEO Hugo Philion is challenging Ripple CTO David Schwartz's view of XRP Ledger lending. Philion argues that Schwartz is overlooking the scale of external infrastructure that can plug into Ripple's network and unlock passive lending demand.
XRPL's native lending protocol remains stalled
The XRP Ledger's native lending protocol, XLS-66, is stalled at the validator voting stage. That proposal, designed for off-chain underwriting by Clearpool and Cicada, is still awaiting approval. Flare built a workaround instead, using Protocol Managed Wallets and its Flare Confidential Compute stack so that applications can run custom logic on top of the ledger. Philion says these two components bring XRPL as close as possible to full smart contract capability, letting add-ons function as if they were native to the network.
Investors have already borrowed $7.2 million against wrapped XRP
Philion cites a lending market Flare has already deployed on external platforms using FXRP, its wrapped XRP token. Investors have borrowed $7.2 million in RLUSD through Flare's infrastructure, posting 10.8 million wrapped XRP as collateral. Just three addresses currently hold 93% of that debt in Morpho pools, with Sentora supplying liquidity, despite RLUSD's total supply of $2.4 billion. Philion says the concentration still demonstrates potential demand for the product.
Asset holders using the setup can lend coins directly from their native wallets as collateral, avoiding the risks of cross-chain bridges. The fees from that activity flow into FLARE, giving Philion's company a direct economic stake in the outcome.
Flare plans to keep building on its own side
Philion confirmed Flare has plans for further lending products on the XRPL. Rather than wait for Ripple's own ledger upgrades, the company intends to keep deploying programmable logic on its own infrastructure, directing new financial flows into its ecosystem.
Source: U.Today
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