Flare CEO Hugo Philion Bets XRP Lending Will Outgrow David Schwartz's Forecast

David Schwartz Flags an Open Lending Field

A public wager has split two of the most recognizable builders around XRP over how large lending on the XRP Ledger can become. Ripple CTO Emeritus David Schwartz and Flare CEO Hugo Philion exchanged posts this week, and the tone stayed cordial even as the disagreement exposed a practical race: whoever ships XRP credit markets first will set the terms before the ledger's own tools arrive. Validators are still voting on XLS-66, the amendment that would add a native lending protocol; the draft sits in the ledger's public standards repository. The ledger upgrades through validator consensus rather than a governance token, so the proposal lives or dies with that vote, and it would arrive as an amendment, not a fork that splits the chain. The XRPL Commons group said on X that lending is close to launch, and it promoted a New York hackathon with dedicated lending and borrowing tracks. Both men agree the feature is coming; what they dispute is its ceiling. Schwartz's position, laid out in a reply on X on Tuesday, is that nobody has built anything with the feature yet, which leaves early developers a wide field. Asked what part of the existing protocol interests him most, he pointed to the issued-asset scheme first, then lending, for the plain reason that it is new and unused. Extending credit on the ledger appealed to him from the start, and he called lending one of the biggest needs in any financial system. His reading of the ledger's philosophy favors curated, best-in-class implementations of useful functions over a crowded field of near-duplicates. First-mover advantage, as the October 6 post put it, is still wide open. Philion answered on Wednesday, wagering that even Schwartz may be underestimating how big the market can get. The XRP price is not the story here; the argument concerns infrastructure rather than the tape.

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Flare Builds Lending Outside the Ledger

Philion's reply matters less for the wager than for the plan attached to it. Flare will not wait for major XRPL upgrades. It intends to run lending logic on its own chain, using Protocol Managed Wallets and the Flare Confidential Compute stack, a setup designed to keep custody close to the native wallet layer while delivering something near full smart-contract capability. In his view, observers overlook the outside infrastructure that can plug into the ledger; Flare operates a separate network that connects to XRPL without becoming a sidechain. Holders could lend from native XRPL wallets, keep assets out of traditional cross-chain bridges, and see fees flow into the Flare ecosystem. Demand has already surfaced on those rails. On-chain data from Morpho shows investors have borrowed $7.95 million in Ripple's RLUSD stablecoin against 10.8 million wrapped XRP (FXRP), at a 4.30% borrow rate and a 4.71% rate for lenders. The market's total value locked (TVL) remains small beside RLUSD's supply of roughly $2.53 billion, which leaves room to grow. Concentration qualifies the signal: three addresses hold about 93% of that debt in Morpho pools, and Sentora supplies the liquidity. Even discounted, the numbers show borrowers paying for XRP-backed credit before the native feature activates. That momentum is building across the XRP ecosystem ahead of launch, and on that point both executives agree; only the ceiling divides them. Traders who prefer price structure to protocol debates can follow our XRP technical analysis, and model-based forecasts extend the same argument over a longer horizon, with one putting XRP at $50 by 2027.

The reading from here: the two routes look more like complements than rivals. XLS-66 hands builders the tool Schwartz wants used, while Flare's stack sells reach into markets the amendment cannot touch yet. What the $7.95 million actually proves is narrower than either side's framing, since three addresses account for 93% of the debt. Chartists have already mapped the downside case, with one analyst drawing XRP below $1.50 in a 2017-style base. As for the wager itself: Philion was asked how big ledger lending can get, and he answered as an infrastructure seller, while Schwartz answered as a protocol designer. Neither has posted the number behind his bet.