Flare's FXRP token is now live as collateral in Sentora's RLUSD vault on Morpho, letting XRP holders borrow against their position on Ethereum without selling their tokens. The vault, which holds roughly $280 million in RLUSD, is open to all users — no whitelist required, though a supply cap is in place at launch. It's the first time any version of XRP has been accepted as collateral in an institutional lending vault on Ethereum mainnet.
From XRP to Ethereum DeFi
Users mint FXRP through Flare's FAssets system, then bridge it to Ethereum via Stargate. Once there, they can deposit FXRP into the Morpho-based vault and borrow RLUSD, a stablecoin issued by Sentora. The whole loop lets holders keep their XRP exposure while tapping into Ethereum's lending markets — something that's been technically possible but institutionally off-limits until now.
Flare Co-founder and CEO Hugo Philion said limited infrastructure had restricted XRP's DeFi use for years. The approval, he added, shows institutional risk managers now recognize FXRP as collateral on Ethereum.
Institutional risk managers sign off
Sentora didn't rush the integration. The firm completed a review covering market behavior, price oracles, liquidity, and liquidation mechanisms before giving FXRP the green light. Sentora Co-founder Jesus Rodriguez said the move brings XRP into on-chain credit markets and expands its practical use across decentralized lending.
The timing matters. XRP has long been a top-tier asset by market cap, but its DeFi footprint on Ethereum has been near zero. FXRP is a wrapped version that runs on Flare's network, and getting it past Sentora's risk committee signals a shift in how traditional crypto lenders view non-Ethereum-native assets.
Isolated market design
Morpho Blue isolates each lending market, so the FXRP/RLUSD pool gets its own oracle system and liquidation parameters. That structure limits contagion risk — if something goes wrong with this vault, it doesn't spill into other Morpho markets. Borrowers pay interest based on utilization and must keep enough collateral to avoid liquidation.
The setup is a far cry from the pooled-risk models that defined early DeFi lending. For a first-of-its-kind collateral like FXRP, that isolation was likely a prerequisite for Sentora's approval.
Smart Accounts and direct transfers
Flare isn't stopping here. The team is building Smart Accounts, which would let users complete the entire process directly from XRP Ledger wallets — no manual bridging steps. Flare is also working on direct FXRP transfers from the XRP Ledger to Ethereum, which would cut out the current multi-step workflow.
Neither feature has a release date yet. But if they land, the friction that's kept XRP out of Ethereum DeFi for years could finally disappear.
