XRP holders can now access decentralized lending on Ethereum without selling their tokens, following the approval of FXRP as collateral in Sentora’s RLUSD lending vault on Morpho.
The integration, announced by Flare, represents a significant step in expanding XRP’s role within decentralized finance by allowing users to borrow RLUSD while maintaining exposure to their XRP holdings.
FXRP Approved for Institutional Lending
According to a press release, Sentora approved FXRP for use in its institutionally managed RLUSD vault on August 3. The vault currently holds approximately $280 million in RLUSD and now supports a dedicated FXRP and RLUSD lending market through Morpho Blue.
The development marks the first time an XRP based asset has been accepted as collateral in an institutional lending vault on Ethereum’s mainnet.
Users can create FXRP through Flare’s FAssets system, transfer it to Ethereum using Stargate, and use it as collateral to borrow RLUSD without having to sell their XRP.
The lending market is open to all participants without a whitelist requirement. A borrowing limit has been introduced at launch, with the cap expected to increase as liquidity in the market expands.
Flare Co founder and Chief Executive Officer Hugo Philion said XRP’s participation in decentralized finance has historically been limited by a lack of infrastructure. He added that the approval demonstrates institutional confidence in FXRP as a recognized collateral asset on Ethereum rather than simply another bridged token.
Sentora Co founder and Chief Technology and Product Officer Jesus Rodriguez echoed that view, saying the integration brings XRP into on chain credit markets and significantly expands its utility within decentralized lending.
Risk Management and Future Plans
Before approving FXRP as collateral, Sentora conducted a detailed assessment covering market performance, pricing oracles, liquidity conditions, and liquidation mechanisms. The company said FXRP will remain subject to the same ongoing monitoring standards applied to all approved collateral assets.
Morpho Blue isolates individual lending markets, meaning any risks associated with the FXRP and RLUSD pool remain contained within that specific market. Each pool also operates with its own pricing oracle and liquidation rules.
Borrowers will pay interest based on market utilization and must maintain sufficient collateral to avoid liquidation.
Looking ahead, Flare is developing Smart Accounts that will enable users to complete the borrowing process directly from XRP Ledger wallets. The company is also working on a direct bridge that will allow FXRP to move from the XRP Ledger to Ethereum without additional transfer steps.#crypto#cryptonews https://coinsignals.nethttps://t.me/coinsignalpublic
