FXRP approved as collateral for $280 M RLUSD Ethereum vault

A major lending market on Ethereum has, for the first time, approved a tokenized version of XRP as collateral, enabling holders of the cryptocurrency to borrow against their holdings without selling them. The integration, announced this week, involves Flare Network's FXRP token and a $280 million lending vault managed by Sentora on the Morpho Blue protocol.

The new market allows users to deposit FXRP as collateral to borrow RLUSD, a U.S. dollar-pegged stablecoin issued by Ripple. This marks the first time an XRP-based asset has been accepted in an institutionally curated Ethereum lending vault, addressing a long-standing gap for XRP holders who have had limited options to use their assets in decentralized finance (DeFi) on Ethereum. The XRP Ledger, while having its own decentralized exchange, has a relatively small DeFi ecosystem compared to other networks.

To access the lending market, users must currently convert their XRP into FXRP via Flare's FAssets system, bridge the tokens to Ethereum, and then deposit them into the isolated FXRPRLUSD market on Morpho Blue. Flare is developing tools to streamline this multi-step process, aiming to eventually allow users to authorize the...