XRP's Emerging Credit Market Heavily Concentrated Among Whales

XRP has begun supporting live dollar borrowing on Ethereum, opening a new credit use case for the asset. However, the market remains heavily concentrated among a handful of borrowers, with three addresses accounting for almost all of the debt.

As of October 1, there was approximately $7.2 million in outstanding loans against 10.76 million FXRP, a tokenized representation of XRP, on Morpho, a market backed by Flare. The three largest addresses held 93% of this debt, giving them outsized influence over the market.

The concentration of the market may be even greater than the address count suggests, as on-chain records identify wallets rather than their owners. This could mean that several addresses belong to the same investor or institution.

While the market has shown some liquidations in September, no realized or unrealized bad debt has been recorded as of October 1. However, a sharper move could provide a more meaningful test of the market's stability.