XRP holders can now borrow Ripple's RLUSD stablecoin on Ethereum without selling their tokens, using wrapped XRP as collateral in a $280 million lending pool managed by Sentora on Morpho Blue. The approval marks the first time an XRP-linked asset has been accepted as collateral in the vault, opening a permissionless, isolated market where borrowers post FXRP and draw RLUSD at their chosen loan-to-value ratio.
Institutional risk framework applied
Sentora signed off after reviewing FXRP's market behavior, oracle design, liquidity and liquidation capacity under its institutional risk framework. The asset will face the same ongoing monitoring as other collateral in the pool. Flare co-founder and chief executive 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.
Isolated structure contains contagion
The isolated structure is what makes the approval possible. 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. That containment is the only reason a wrapped asset with limited history cleared an institutional risk review.
Friction remains high for users
Getting there still takes several steps. Users mint FXRP through Flare's FAssets system, bridge it to Ethereum via Stargate, deposit it into the market and borrow at their chosen loan-to-value ratio. Flare says it is building a route through Smart Accounts that would let holders authorize the whole sequence from an XRP Ledger wallet, with direct XRPL-to-Ethereum minting also in development.
Scale is the open question
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 describes as a conservative supply cap that may rise as usage grows. CoinDesk has reached out to Flare and Sentora for the supply cap, loan-to-value ratio, liquidation threshold and oracle source, and will update with any response.