XRP Holders Gain Ethereum Lending Access as RLUSD Borrowing Pool Reaches $280M

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XRP holders can now access borrowing options on Ethereum without selling their tokens, thanks to a new $280 million lending pool that has added an XRP-linked asset as collateral for the first time.

Flare, a blockchain designed to bring XRP into decentralized finance applications, announced Monday that its wrapped XRP asset has been approved as collateral by Sentora, the manager of a $280 million lending pool focused on Ripple’s RLUSD stablecoin.

Through the new system, users can lock up wrapped XRP, known as FXRP, and borrow RLUSD against their holdings while maintaining exposure to XRP.

The approval creates a dedicated FXRP/RLUSD lending market on Morpho Blue, allowing XRP holders to access liquidity without converting their assets into cash. The market is open to users without permission requirements or whitelist restrictions.

Before approving FXRP, Sentora assessed the asset’s trading behavior, oracle infrastructure, available liquidity, and liquidation mechanisms through its institutional risk evaluation process. The collateral will continue to receive the same monitoring standards applied to other assets within the lending vault.

Currently, accessing the market requires several steps. Users must first mint FXRP through Flare’s FAssets system, transfer it to Ethereum using Stargate, deposit the token into the lending market, and then borrow RLUSD based on their preferred loan-to-value ratio. Flare said it is developing Smart Account functionality that would allow users to complete the process directly from an XRP Ledger wallet, while direct XRPL-to-Ethereum FXRP minting is also being explored.

Flare co-founder and CEO Hugo Philion said XRP remains one of the largest cryptocurrencies by market value but has historically seen limited adoption in decentralized finance. He argued that having FXRP reviewed and approved by an institutional risk team for use on Ethereum provides more credibility than simply adding another bridge-based asset.

The isolated market structure of Morpho Blue played a key role in making the integration possible. Each market operates independently with its own collateral asset, debt asset, price oracle, and liquidation parameters, meaning any issues within the FXRP market would remain contained rather than affecting the wider lending ecosystem.

However, adoption remains the main challenge. Around 155 million FXRP has been minted since launch, far below Philion’s target of bringing 5 billion XRP into the Flare ecosystem within six months. The new lending market will initially operate with what Flare described as a conservative supply limit, which could expand as demand increases.

Flare and Sentora have been contacted for additional details regarding the initial supply cap, loan-to-value limits, liquidation thresholds, and oracle infrastructure, with updates expected once further information becomes available.

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