Demand Surges for XRP-Backed RLUSD Loans as New Ethereum Market Fills Within Hours

XRP holders have wasted little time putting Ripple's stablecoin to work. Just days after Blockster reported on the launch of Flare's FXRP integration with Sentora's RLUSD lending market, the protocol has already seen its first 1 million RLUSD fully borrowed, highlighting immediate demand for stablecoin liquidity without requiring investors to sell their XRP.

The lending market, reported by CoinDesk, allows holders to deposit wrapped XRP (FXRP) as collateral and borrow RLUSD through an institutionally curated market on Morpho Blue, backed by Sentora's $280 million RLUSD lending vault.

Strong Demand From Day One

The market launched with a 5 million RLUSD supply cap, with risk approval already in place to expand capacity to approximately 9 million RLUSD as adoption grows.

Flare intentionally seeded the market with 1 million RLUSD, and the full allocation was borrowed within hours of launch. According to the team, approximately 1 million RLUSD has now been borrowed against FXRP, demonstrating immediate demand for XRP-backed borrowing without requiring holders to reduce their market exposure.

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The latest figures build on the announcement covered earlier this week, when Blockster reported that XRP holders could begin using FXRP as collateral to borrow RLUSD on Ethereum for the first time.

Bringing XRP Into Institutional DeFi

Today, users mint FXRP through Flare's FAssets system before bridging the asset to Ethereum, depositing it into the new Morpho Blue market and borrowing RLUSD based on their preferred loan-to-value ratio.

Unlike Flare's native lending ecosystem, the new market operates under Sentora's institutional risk framework. Before approving FXRP as collateral, Sentora evaluated the asset's market liquidity, oracle architecture, liquidation mechanics and overall risk profile.

The market also uses separate pricing infrastructure across both networks. FXRP pricing is secured on Flare through the network's FTSOv2 oracle, while collateral pricing on Ethereum is handled through Sentora's ChainlinkOracleV2 implementation.

XRP's DeFi Footprint Continues to Grow

Around 150 million FXRP is currently in circulation, with approximately 34.5 million FXRP already serving as collateral on Mystic Finance, Flare's native Morpho deployment.

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The new Ethereum lending market represents a different milestone by extending XRP-backed borrowing into an institutionally curated lending environment rather than Flare's own ecosystem.

Flare is also working to simplify the borrowing experience. Future upgrades are expected to allow users to authorize the full process directly from an XRP Ledger wallet through Smart Accounts, while native XRPL-to-Ethereum minting is also under development.

Unlocking New Utility for XRP

For years, XRP has been one of the largest cryptocurrencies by market capitalization, yet its role in decentralized finance has remained relatively limited compared with assets such as ETH and BTC.

The rapid uptake of the new FXRP/RLUSD market suggests demand is growing for ways to access liquidity without selling XRP. If borrowing activity continues at its current pace, the lending pool is expected to expand beyond its initial limits, giving holders additional ways to put their assets to work while maintaining long-term exposure.

Published on Flare

Demand Surges for XRP-Backed RLUSD Loans as New Ethereum Market Fills Within Hours