In Brief:
- Flare CEO Hugo Philion challenged David Schwartz’s XRP lending assessment, outlining plans for services using external infrastructure and native wallets.
- Borrowers accessed $7.2 million in RLUSD loans backed by 10.8 million wrapped XRP through Flare’s lending market on external platforms.
- Three addresses hold 93% of Morpho pool debt, while Sentora supplies liquidity and Flare plans to receive associated infrastructure fees.
Flare CEO Hugo Philion has challenged Ripple CTO David Schwartz’s assessment of XRP lending, pointing to existing borrowing activity. According to Philion, Flare’s infrastructure could expand lending services on the XRP Ledger while its native proposal awaits validator approval.
Philion cited $7.2 million in RLUSD borrowing backed by 10.8 million wrapped XRP as evidence supporting his position, pointing to Flare’s lending market on external platforms using FXRP, a wrapped representation of XRP.
Philion outlined plans to extend lending access through infrastructure supporting application logic outside the XRP Ledger, arguing that Schwartz overlooks the scale of external technology developers could integrate with the network for financial applications.
Flare’s proposed approach combines Protocol Managed Wallets with its Flare Confidential Compute stack to support applications with customized logic. Philion described the combination as a way to provide functionality approaching full smart contract capabilities for XRP Ledger users.
Under that arrangement, holders would access lending directly from their native wallets, according to the Flare chief executive. Philion also claimed the proposed setup would avoid cross-chain bridge risks while making connected applications function like native services.
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Meanwhile, the XRP Ledger’s native lending proposal, XLS-66, remains at the validator voting stage without the approval required for activation. Its proposed model involves off-chain underwriting by Clearpool and Cicada, contrasting with the collateralized FXRP borrowing.
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FXRP Borrowing Figures Show Activity and Concentration in Morpho Lending Pools
The existing market allows borrowers to pledge wrapped XRP as collateral and access loans denominated in Ripple’s RLUSD stablecoin. Philion highlighted this activity as practical evidence for his argument that XRP lending opportunities extend beyond the native protocol.
Borrowers have pledged 10.8 million FXRP against $7.2 million in RLUSD loans through the infrastructure described in his comments. Those figures concern the wrapped asset market, while Flare’s proposed wallet infrastructure targets lending access directly from native wallets.
Borrowing remains concentrated across a small number of participants, with three addresses accounting for 93% of Morpho pool debt. Sentora provides liquidity to the relevant pools, while the supplied report places RLUSD’s total supply at approximately $2.4 billion.
Philion nevertheless pointed to the market’s borrowing activity when outlining Flare’s broader plans to support lending on the XRP Ledger. Those plans would use Flare’s programmable infrastructure rather than depend on approval of the ledger’s native lending proposal.
Flare also expects its ecosystem to receive the associated fees, linking the proposed services to an economic incentive. Philion confirmed the company’s interest in XRP Ledger lending alongside the existing FXRP market and its reported borrowing figures.
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