Ripple Expands XRP's DeFi Role with RLUSD and XRPL Upgrades

While the market remains choppy, Ripple is making some major strategic moves.

Interestingly, Ripple’s focus isn’t limited to just one sector. With back-to-back partnerships since the start of August, the company is clearly building the foundation for XRP’s year-end outlook and a possible early 2027 rally. One key development comes from Sentora.

In a post on X, the institutional DeFi platform announced that FXRP is now live as collateral in Sentora’s RLUSD vault on Morpho. This marks a key step in expanding XRP’s role in DeFi.

Through the Sentora-Flare Networks partnership, XRP holders can now use FXRP as collateral in Sentora’s RLUSD vault on Morpho, taking XRP into Ethereum mainnet DeFi.

As one analyst explained, XRP holders can now mint FXRP, bridge it to Ethereum, use it as collateral, and borrow RLUSD while maintaining their XRP exposure.

Essentially, holders no longer need to swap their XRP for RLUSD to access liquidity. Instead, they can now put their XRP to work within DeFi.

This ties into another major development from Ripple that could further boost XRP’s on-chain utility. RippleX Head of Product Jazzi Cooper revealed that the upcoming XRPL 3.3.0 upgrade will bring ZK-powered privacy for tokenized assets, with a focus on institutional users.

As tokenization grows, the ability to access liquidity from XRP without selling it could become a major use case for the asset.

In short, Ripple’s latest moves show a clear push to expand XRPL’s DeFi ecosystem, with RLUSD emerging as a key part of the broader strategy.

More importantly, the on-chain data backs this up, suggesting these developments are beginning to build momentum for Ripple’s [XRP] Q3 outlook.

The timing of Ripple’s recent moves also lines up with what’s happening on-chain.

From a technical standpoint, XRP has yet to catch up. While Ripple continues to strengthen XRPL’s fundamentals through strategic partnerships, XRP’s price action remains weak.

The token is still trading near a key support level, with Q3 gains sitting at just over 4% so far.

The same trend is visible on-chain. As the chart below shows, XRPL’s stablecoin market cap recently fell by more than 14% in just 24 hours, with RLUSD accounting for nearly 100% of the entire decline. Since then, sentiment has improved.

Ripple recently minted nearly 63 million RLUSD, helping push XRPL’s stablecoin market cap back above $950 million, an 11% recovery that suggests liquidity is starting to return.

The timing is worth watching.

The rebound came shortly after Ripple’s back-to-back strategic moves, suggesting the company is actively working to grow liquidity across XRPL. Bringing FXRP into Ethereum DeFi and expanding support for tokenized assets both point to the same goal – increasing on-chain activity.

If this trend continues, it could become an important catalyst for XRP in Q3. More liquidity could drive more on-chain activity, which may eventually support stronger demand for XRP.