XRP holders have borrowed approximately $7.2 million in RLUSD stablecoin against FXRP tokenized collateral through a Morpho market launched in August via Flare, according to on-chain data. The concentration is extreme: three addresses control 93% of the outstanding debt.
As of October 1, the market held $7.18 million in RLUSD loans backed by 10.76 million FXRP. Sentora’s RLUSD Main vault supplied 8.53 million RLUSD, nearly all available liquidity to borrowers at the time observed. The FXRP market represents 2.03% of Sentora’s broader vault allocations.
Market Structure and Risk Profile
FXRP allows XRP holders to mint a tokenized representation, move it to Ethereum, and borrow RLUSD without immediately selling XRP exposure. The current Morpho market enforces a 77% debt-to-collateral liquidation threshold.
The largest borrower could withstand a 45% decline in FXRP-to-RLUSD pricing before liquidation. The next two largest borrowers have a 38% decline buffer. A smaller borrower position, holding 121,000 RLUSD debt against 133,000 FXRP collateral, faces a 21% decline threshold.
The market recorded some liquidations in September but showed no realized or unrealized bad debt as of October 1.
The 10 million RLUSD supply limit under the current Morpho market cap remains operative. On-chain records identify wallets rather than owners, so multiple addresses could belong to the same investor or institution.
Ripple’s Lending Infrastructure Roadmap
The FXRP-Morpho structure represents one approach to XRP-backed credit. The XRP Ledger is undergoing security reviews for a proposed lending architecture that would allow fixed-term credit to originate directly on-chain, removing the need to mint FXRP and bridge to Ethereum.
Native XRPL lending would introduce a different credit model from Morpho’s overcollateralized approach. Underwriting would be handled before fixed-term loans are created, rather than enforced through liquidation thresholds on live positions.
