Borrowing against Flare's wrapped XRP token has pushed a lending pool on Morpho close to capacity. Loans of @Ripple's $RLUSD stablecoin against $FXRP, the @FlareNetworks version of $XRP, have
Borrowing against Flare's wrapped XRP token has pushed a lending pool on Morpho close to capacity. Loans of @Ripple's $RLUSD stablecoin against $FXRP, the @FlareNetworks version of $XRP, have reached $8.77M on @Morpho. Since opening on Ethereum in late July, the pool has lent out 94.5% of its RLUSD, leaving only about $500K available to borrow.
Borrowers are paying about 16% to use the market, more than double last week's average. That hands $RLUSD lenders a 15.3% yield. In Morpho-style lending markets, rates typically rise as more of the available supply is borrowed, which is consistent with the jump as the pool approaches full utilisation. The market has grown steadily since launch.
The pool is an isolated FXRP/RLUSD market on Morpho Blue. CoinDesk reported that Flare's wrapped XRP was accepted as collateral by Sentora, which manages a $280 million RLUSD lending pool. Each Morpho Blue market carries its own collateral asset, debt asset, oracle and liquidation threshold, so a failure in the FXRP market stays inside it rather than reaching the rest of the vault, according to the same report. Access is permissionless, with no whitelist required.
Users mint FXRP through Flare's FAssets system, bridge it to Ethereum via Stargate, deposit it into the market and borrow at their chosen loan-to-value ratio, CoinDesk said. The structure lets holders borrow against XRP exposure rather than sell it. FinanceFeeds noted that the path spans four systems, each carrying distinct risk, and that Ripple and Flare are both strategic investors in Sentora, the firm curating the vault.
Concentration is another consideration. In an earlier snapshot, KuCoin News reported that three addresses held 93% of the Morpho pool's debt, when $7.2 million in RLUSD loans were backed by 10.8 million wrapped XRP. Current concentration figures were not available.
With the pool nearly full, further growth in borrowing would depend on additional RLUSD supply. CoinDesk reported that the market opened with what Flare described as a conservative supply cap that may rise as usage grows.
CoinDesk: XRP holders can now borrow RLUSD on Ethereum through $280 million lending poolFinanceFeeds: FXRP approved as collateral in $280m RLUSD vaultKuCoin News: Flare CEO challenges David Schwartz on XRP lending
