Your XRP Can Now Unlock Cash on Ethereum — Without You Selling a Single Coin
Flare's wrapped XRP just got approved as collateral in a $280M Ethereum vault, letting XRP holders borrow RLUSD stablecoins without giving up their coins.
If you’ve ever held XRP and wished you could get your hands on some cash without selling it, there’s now a way to do exactly that. Flare, the blockchain built to bring XRP into decentralized finance, announced on Monday that its wrapped version of the token, called FXRP, has been approved as collateral in a $280 million lending pool on Ethereum. That means XRP holders can borrow Ripple’s RLUSD stablecoin against their coins while still keeping their original XRP exposure intact.
What’s actually happening here
The pool is managed by a firm called Sentora and runs on Morpho Blue, a lending protocol on Ethereum. Until now, no XRP-linked asset had ever been let into this vault. Sentora says it only signed off after checking FXRP’s market behaviour, its price-feed (oracle) design, its liquidity and how easily it could be liquidated if something went wrong — the kind of due diligence institutions expect before trusting a new asset with real money.
Both CoinDesk and Decrypt confirm this is the first time an XRP-based asset has been approved as collateral inside an institutionally curated Ethereum lending vault — a meaningful step for a token that, despite being one of the biggest by market value, has historically had very little presence in DeFi.
How you’d actually use it
Right now, the process takes a few steps. You mint FXRP through Flare’s FAssets system, bridge it over to Ethereum using a cross-chain tool called Stargate, deposit it into the new lending market, and then borrow RLUSD at whatever loan-to-value ratio you choose. Access is permissionless, meaning there’s no waitlist or approval needed to use the market once it’s live.
Flare says it’s working on making this far simpler — eventually letting holders authorize the whole borrowing flow straight from an XRP Ledger wallet, with direct minting between XRPL and Ethereum also in the works. For now, though, it’s still a multi-step process, which matters if you’re new to DeFi and not used to bridging assets between chains.
Why it matters for XRP holders
Flare co-founder and CEO Hugo Philion put it plainly, saying XRP is “one of the largest assets in crypto and one of the least used” in DeFi. Getting an institutional risk team to formally underwrite XRP-backed collateral on Ethereum’s biggest lending rails, he argued, means more than simply listing FXRP on another bridge.
For everyday holders, the practical upside is flexibility: instead of selling XRP to cover a bill, buy another asset, or free up cash, you can now borrow against it and stay in the trade if you still believe in XRP’s long-term price. That said, borrowing against crypto always carries liquidation risk — if XRP’s price drops sharply, your collateral could be sold off automatically to repay the loan, so anyone trying this should understand their loan-to-value ratio carefully before diving in.
The market is structured as what’s called an “isolated” pool on Morpho Blue, meaning each collateral type has its own separate oracle and liquidation rules. In plain terms, if something goes badly wrong specifically with FXRP, it shouldn’t drag down the rest of the $280 million vault or other assets deposited in it.
Still early days
Adoption so far is modest. Roughly 155 million FXRP has been minted since launch, a fraction of Philion’s stated goal of pulling 5 billion XRP into Flare’s ecosystem within six months. The new market is also opening with what Flare calls a “conservative” supply cap, which may be raised later depending on demand.
In short, this is a genuine expansion of what XRP holders can do with their coins — but it’s a new, still-small market, and anyone considering it should treat it the way they would any DeFi lending product: useful, but not without risk.
Read more: XRP Ledger Gained Half a Million New Wallets — Here’s What’s Actually Behind It
