XRP Loans Concentrated Among Whales Amid Market Growth

XRP is becoming a popular collateral for real loans, but the market is already dominated by a handful of large borrowers, or 'whales'.

The market, launched in August through Flare, allows XRP holders to mint FXRP, a tokenized representation of XRP, and borrow Ripple's RLUSD stablecoin without immediately selling their XRP exposure.

As of October 1, the Morpho market backed by FXRP had about 7.18 million RLUSD in outstanding loans against 10.76 million FXRP. However, the three largest addresses accounted for almost all of that debt, limiting the market's representation of broader adoption.

The concentration of borrowers and lenders in the market may be even greater than the address count suggests, as several addresses could belong to the same investor or institution.

The same concentration could become more important if XRP price weakens, as the three biggest borrowers remain well away from the liquidation point. Based on their current debt and collateral, the largest position could withstand a 45% decline in the FXRP-to-RLUSD ratio, while the next two have buffers of about 38%.