Morpho Blue has approved wrapped XRP as collateral within Sentora's RLUSD lending vault on Ethereum, marking the first institutional deployment of FXRP on the network's largest on-chain lending protocol.
The approval, announced through Sentora's X post, enables XRP holders to use their holdings as backing for loans denominated in RLUSD without transferring assets off Ethereum. Morpho Blue, which manages over $20 billion in total value locked, curates collateral through governance-approved vaults rather than permitting all assets directly. Sentora's vault operates with a USD 280 million cap.
XRP has faced limited borrowing infrastructure across chains since Ripple's 2023 shift away from decentralized platforms. Flare Network added FXRP as collateral in February 2026, and Enosys offered XRP-backed CDPs starting in December 2025. Neither deployed the asset on Ethereum's core DeFi stack until this approval.
Wrapped XRP exists because XRP itself operates on a separate ledger incompatible with Ethereum's smart contracts. Flare created FXRP through a bridge mechanism that locks XRP on the XRP Ledger and mints wrapped tokens on Ethereum and Flare. Holders deposit FXRP into Sentora's vault, then borrow RLUSD against it at collateralization ratios set by vault parameters.
Sentora operates multiple lending vaults on Morpho Blue, each with distinct collateral baskets and yield structures. The firm manages over USD 500 million in RLUSD across protocols. RLUSD itself is a stablecoin issued by Ripple and supported by a basket of fiat reserves and short-term government securities.
Morpho Blue's governance has approved roughly 40 collateral types since its November 2023 launch, though deployment on mainstream Ethereum lending remains constrained compared to stablecoins and major layer-1 tokens. XRP's market cap of USD 41 billion ranks it among the top five cryptocurrencies by volume, yet its on-chain lending footprint has lagged peers with institutional backing on Ethereum.
Sentora's USD 280 million vault cap reflects initial caution around FXRP liquidity depth and demand for RLUSD borrowing. If the vault reaches the cap within 30 days, the expansion decision falls to Sentora's governance, which requires token holder voting. The number that decides whether this becomes a material corridor for XRP liquidity is whether Sentora increases the cap within the next two quarters.
