Flare CEO Hugo Philion has publicly pushed back on Ripple CTO David Schwartz's view of XRP lending, arguing that external infrastructure can unlock passive lending markets on the XRP Ledger even before the native XLS-66 proposal is approved. Philion highlighted that $7.2 million in RLUSD loans have already been issued against 10.8 million wrapped XRP (FXRP) through Flare's lending market on external platforms.
Philion outlined a technical path combining Protocol Managed Wallets and Flare Confidential Compute, which he says can support application logic that approaches full smart contract capabilities for XRPL users. Under this model, holders could lend directly from their native wallets, avoiding cross-chain bridge risks and making connected applications function like native services. Flare also expects associated fees to flow to the FLR token.
The existing activity remains highly concentrated, with three addresses accounting for 93% of Morpho pool debt, while Sentora supplies liquidity. RLUSD's total supply stands near $2.4 billion. Meanwhile, XRPL's native lending proposal XLS-66, which would rely on off-chain underwriting by Clearpool and Cicada, remains at the validator voting stage without the required activation approval.
