Three wallets control 93% of $7.2M RLUSD debt backed by FXRP on Morpho

• Three wallets hold 93% of the $7.2 million RLUSD debt against FXRP on Morpho as of Oct. 1.
• Sentora RLUSD Main vault supplies 8.53 million RLUSD, nearly all available liquidity, yet only 2.03% of its total allocations.
• XRPL’s proposed native lending amendments remain in security review, a potential alternative to bridging XRP through Flare and Morpho.

• $7.2M outstanding RLUSD debt posted against FXRP collateral
• 93% share of that debt held by three wallet addresses
• 77% Morpho’s liquidation threshold for FXRP-backed RLUSD loans

A Morpho market backed by FXRP, a tokenized representation of XRP, carried about 7.18 million RLUSD in outstanding loans against 10.76 million FXRP in collateral as of Oct. 1, according to on-chain data first reported by cryptoslate.com. FXRP lets XRP holders bridge their tokens to Ethereum and borrow Ripple’s RLUSD stablecoin without selling their underlying XRP exposure, a credit use case the asset did not previously have on that chain.

The market launched in August through Flare. It adds bridge, collateral and redemption dependencies that holders of native XRP never face.

Three Addresses Control 93% of FXRP’s $7.2 Million Debt

The three largest wallets account for 93% of the roughly $7.2 million in outstanding debt, giving a handful of positions outsized control over the market’s total size. A single large repayment could shrink borrowing sharply, while a fresh loan from the same addresses could lift the total without adding any new participants.

On-chain records only identify wallets, not owners, so the real concentration could be tighter still if several addresses trace to one investor.

Funding is just as concentrated as borrowing. Sentora RLUSD Main supplied about 8.53 million RLUSD, nearly all the liquidity available to borrowers. That stake is still only 2.03% of Sentora’s broader vault allocations, and the vault can supply up to 10 million RLUSD under its current cap, leaving room to expand if demand grows beyond its current narrow base.

Morpho’s 77% Threshold Leaves Borrowers Wide Buffers, For Now

Morpho’s protocol allows any external party to liquidate a position once its debt value climbs above 77% of its collateral value, the market’s set Liquidation Loan-To-Value threshold. Based on current debt and collateral, the largest borrower could absorb roughly a 45% drop in the FXRP-to-RLUSD ratio before hitting that line, while the next two largest have about a 38% cushion.

Smaller positions carry less room. One with 121,000 RLUSD of debt against 133,000 FXRP would reach liquidation after roughly a 21% decline.

The market saw some liquidations in September but recorded no realized or unrealized bad debt as of October 1. A sharper price move would be a more meaningful stress test, since a liquidator absorbing one of the largest positions would suddenly hold a sizeable block of FXRP, which it could sell, hold, or redeem back through Flare toward native XRP.

XRPL’s Native Lending Amendments Still Await Validator Approval

Developers are separately preparing to bring lending directly onto the XRP Ledger, removing the need to mint FXRP and bridge it to Ethereum at all. The proposed architecture is currently undergoing security reviews and would require validator approval before activation, offering fixed-term credit underwritten before origination rather than Morpho’s overcollateralized model.

More lending capacity would not automatically mean more buyers of XRP. Existing holders could simply redeploy tokens they already own through the new route, much as tokenized-asset platforms have expanded collateral options without necessarily widening their user base.

Borrower composition will matter as much as loan volume once native lending goes live. A market that grows because the same large holders borrow more would deepen XRP’s utility without proving wider adoption, while new borrowers spreading debt across more addresses would be the stronger signal.

The CCS read. We read this less as a verdict on XRP adoption and more as a working balance sheet for Ripple’s RLUSD. Every dollar borrowed against FXRP is a live RLUSD liability circulating on Ethereum, regardless of how concentrated the borrowers are. That gives Ripple a functioning demand channel for its stablecoin even before XRP’s own holder base broadens.

The next test arrives if XRPL’s native lending amendments clear their security reviews and win validator approval, giving borrowers a route that skips Flare’s bridge entirely. Whether that pulls in new participants or simply lets the same large XRP holders re-lever the same capital through a second venue remains the open question market watchers will track once the amendments reach a vote.