XRP holders can now borrow Ripple's RLUSD stablecoin against wrapped XRP without selling their coins, after Flare's FXRP token won approval as collateral in a $280 million lending pool on Ethereum. Sentora, which manages the pool, cleared the asset through an isolated market on Morpho Blue following a review of its market behavior, oracle design, liquidity and liquidation capacity.
XRP holders can now borrow against their coins on Ethereum without selling them. Flare, the blockchain that lets XRP be used in decentralized finance, told CoinDesk on Monday that its wrapped token, FXRP, has been accepted as collateral by Sentora, which manages a $280 million lending pool of Ripple's RLUSD stablecoin. Borrowers post FXRP and take out RLUSD against it.
An isolated market with its own risk line
The approval opens an isolated FXRP/RLUSD market on Morpho Blue, where holders can borrow against XRP exposure rather than sell it. Access is permissionless, with no whitelist required.
Sentora reviewed FXRP's market behavior, oracle design, liquidity and liquidation capacity under its institutional risk framework before signing off, and the asset will face the same ongoing monitoring as other collateral in the vault. Each Morpho Blue market carries its own collateral asset, debt asset, oracle and liquidation threshold, so a failure in the FXRP market stays inside it rather than reaching the rest of the vault.
Minting and bridging still take several steps
Getting there currently takes several steps. Users mint FXRP through Flare's FAssets system, bridge it to Ethereum via Stargate, deposit it into the market, then borrow at their chosen loan-to-value ratio. Flare is building a route through Smart Accounts that would let holders authorize the entire sequence from an XRP Ledger wallet, with direct XRPL-to-Ethereum minting also in development.
XRP still barely used in DeFi
Flare co-founder and CEO Hugo Philion said XRP is one of the largest assets in crypto and one of the least used in DeFi, and that having an institutional risk team underwrite it on Ethereum mainnet counts for more than another bridge listing.
Roughly 155 million FXRP has been minted since launch, against Philion's stated target of drawing 5 billion XRP into Flare's ecosystem over six months. The new market opens with what Flare calls a conservative supply cap that may rise as usage grows.
Source: CoinDesk
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