- Ripple is expanding XRP’s DeFi utility by allowing holders to use FXRP as collateral for RLUSD without selling their XRP.
- The upcoming XRPL upgrade and recovering RLUSD liquidity could support stronger on-chain activity in the months ahead.
Ripple is strengthening XRP’s position in decentralized finance (DeFi) through new infrastructure designed to increase liquidity and expand on-chain use cases. The latest developments introduce new ways for XRP holders to access capital without selling their holdings while preparing the XRP Ledger (XRPL) for greater institutional adoption.
The updates come as Ripple continues to invest in the XRPL ecosystem despite mixed market conditions. Together, they could support stronger network activity during the third quarter.
XRP Holders Can Access RLUSD Without Selling
Ripple’s latest DeFi expansion centers on FXRP, a wrapped version of XRP that can now be used as collateral in Sentora’s RLUSD vault on Morpho through a partnership with Flare Networks.
The integration allows XRP holders to mint FXRP, transfer it to Ethereum, use it as collateral, and borrow RLUSD. This means investors can unlock liquidity while keeping exposure to XRP instead of selling their coins.
The new feature also extends XRP’s reach into Ethereum’s DeFi ecosystem, creating additional opportunities for lending and borrowing across networks.
By removing the need to sell XRP to access funds, Ripple is expanding the asset’s practical use within decentralized finance.
XRPL 3.3.0 Upgrade Targets Institutional Adoption
Ripple is also preparing the XRPL 3.3.0 upgrade, which will introduce zero-knowledge (ZK)-powered privacy for tokenized assets.
The new privacy features are designed to meet institutional requirements as tokenization continues to grow. Organizations can benefit from greater transaction privacy while still using the transparency and efficiency of blockchain technology.
The upgrade also aims to reduce risks associated with DeFi applications by improving security for tokenized assets.
Combined with the RLUSD ecosystem, the new capabilities could make XRPL more attractive for financial institutions exploring blockchain-based asset management.
RLUSD Liquidity Begins to Recover
Recent on-chain data suggests liquidity across XRPL is showing signs of improvement.
According to DeFi data, XRPL’s stablecoin market capitalization recently dropped by more than 14% within a day after RLUSD accounted for nearly all of the decline. However, conditions have since improved.
Ripple minted nearly 63 million RLUSD, helping lift XRPL’s stablecoin market capitalization above $950 million. The recovery indicates liquidity is returning to the network after the recent decline.
The rebound closely followed Ripple’s latest ecosystem announcements, suggesting the company is actively supporting on-chain growth through new products and partnerships.
What It Could Mean for XRP
Although XRP’s price has remained close to an important support level, Ripple continues to focus on strengthening the network rather than short-term price action.
Expanding FXRP into Ethereum DeFi, increasing RLUSD liquidity, and introducing privacy enhancements for tokenized assets all support broader adoption of the XRP Ledger.
If liquidity continues to improve and more users adopt these services, network activity could increase over the coming months. Stronger on-chain usage may also support demand for XRP as the ecosystem continues to expand.
As Ripple builds more infrastructure around RLUSD and XRPL, XRP is gaining additional utility beyond payments, positioning it for a larger role in decentralized finance and tokenized assets.
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Disclaimer:
This article is for informational purposes only and should not be considered financial or investment advice. Cryptocurrency investments carry risk, and readers should conduct their own research before making any investment decisions.
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