Flare has expanded XRP's role in decentralized finance by enabling FXRP to be used as collateral in Sentora's RLUSD Main vault on Morpho, opening a permissionless lending market where users can borrow RLUSD while maintaining exposure to XRP.
The integration marks the first time an XRP-based asset has been approved as collateral within an institutionally managed lending vault on Ethereum. Sentora's RLUSD Main vault currently holds around $280 million in deposited RLUSD, making it the largest institutionally curated RLUSD vault on the network.
Under the new setup, users can mint FXRP through Flare's FAssets protocol, bridge the asset to Ethereum, deposit it into an isolated lending market on Morpho Blue and borrow RLUSD without liquidating their XRP position.
Expanding XRP's utility in DeFi
Although XRP ranks among the largest cryptocurrencies by market capitalization, its participation in decentralized finance has remained limited compared with assets such as ETH or BTC.
Flare said the new integration is intended to close that gap by allowing XRP holders to unlock liquidity without giving up price exposure. Because FXRP represents XRP on Flare, borrowing activity on Ethereum feeds back into Flare's infrastructure, potentially increasing demand for the wrapped asset.
The lending market is permissionless, meaning users can access it without approval or whitelisting. Borrowers remain exposed to XRP through FXRP while selecting their preferred loan-to-value ratio, provided their positions stay below the liquidation threshold.
Before adding FXRP as eligible collateral, Sentora assessed the asset under its institutional risk framework, reviewing factors including liquidity, market behavior, oracle design and liquidation mechanisms. The asset will remain subject to ongoing monitoring alongside the vault's other supported collateral types.
The market itself is built on Morpho Blue, Ethereum's permissionless lending infrastructure, where each lending pool operates independently with its own collateral asset, debt asset, oracle configuration and liquidation parameters. This isolated structure is designed to contain risks within individual markets rather than across the broader protocol.
At launch, the market will operate with a conservative supply cap, although that limit may be increased as liquidity and adoption grow.
Simpler access planned
Flare also outlined plans to streamline the borrowing process through Flare Smart Accounts. The proposed workflow would allow XRP holders to authorize transactions directly from an XRP Ledger wallet, while the underlying infrastructure automatically handles FXRP minting, cross-chain transfers, collateral deployment and RLUSD borrowing.
The company is also developing direct FXRP minting from XRPL to Ethereum, removing the need for a separate bridging step.
Beyond expanding borrowing options for XRP holders, the launch provides other Morpho vault curators with a benchmark for evaluating FXRP under their own lending frameworks.
Because Morpho's markets are permissionless, third-party wallets, exchanges and DeFi applications can also integrate the new lending market into their own products.
U.Today Editorial Team
Dan Burgin
