XRP (CRYPTO: XRP) holders can now borrow Ripple USD (CRYPTO: RLUSD) against their holdings on Ethereum (CRYPTO: ETH) without selling their tokens.
New Institutional Backed Lending Market
Flare announced Monday that its wrapped version of XRP, FXRP, has been approved as collateral by Sentora, which manages a $280 million RLUSD lending pool.
The approval enables an isolated FXRP/RLUSD lending market on Morpho Blue, allowing users to deposit FXRP as collateral and borrow RLUSD while maintaining exposure to XRP’s price.
The lending market is permissionless, meaning users do not need to join a whitelist to participate.
The integration gives XRP holders a way to unlock liquidity without selling their tokens, expanding the cryptocurrency’s role in decentralized finance.
Adoption remains an early-stage challenge. Flare said around 155 million FXRP has been minted since launch, compared with its longer-term goal of bringing 5 billion XRP into its ecosystem over the next six months.
XRP Least Utilized Crypto Asset
Flare expanded decentralized finance utility for the asset through a new institutional-backed lending market.
Currently, users must mint FXRP through Flare’s FAssets protocol, bridge it to Ethereum using Stargate, deposit the asset into Morpho Blue and borrow RLUSD at their preferred loan-to-value ratio.
Flare said it is developing Smart Accounts that would allow XRP Ledger users to authorize the entire process directly from their wallets, while native XRPL-to-Ethereum minting is also under development.
Flare co-founder and CEO Hugo Philion told CoinDesk that XRP remains one of crypto’s largest assets but one of the least utilized in DeFi, adding that institutional approval of FXRP as Ethereum collateral is more meaningful than simply adding another bridge.
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