Ripple's Schwartz Underestimates XRP Lending Potential, Flare CEO Claims

Flare CEO Hugo Philion challenges Ripple’s David Schwartz, using proxy infrastructure to unlock the passive XRP lending market.

Gamza Khanzadaev · 7 Oct 2026 · 5 min read

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Ripple’s Schwartz Underestimates XRP Lending Potential, Flare CEO Claims

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By
Gamza Khanzadaev

Wed, 7/10/2026 – 16:13

Flare CEO Hugo Philion challenges Ripple’s David Schwartz, using proxy infrastructure to unlock the passive XRP lending market.

Ripple's Schwartz Underestimates XRP Lending Potential, Flare CEO Claims

Cover image via depositphotos.com

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Ripple CTO David Schwartz is underestimating the true potential of lending on the XRP Ledger, and the Flare Networks ecosystem is ready to prove it in practice. Flare CEO Hugo Philion made this ambitious but friendly claim.

In his view, one of XRP’s chief architects is overlooking what many users have also missed – the scale of external infrastructure that can be integrated into Ripple’s network.

Philion explains that while the XRPL’s native lending protocol, XLS-66, is stalled at the validator voting stage, his team has already built a workaround. Flare is betting that, with Protocol Managed Wallets and its Flare Confidential Compute stack, any application can be built with whatever logic you want.

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@JoelKatz thinks that lending on the XRPL will be big. As incredibly bright as David is – I’d wager that even he is underestimating quite how big it can be! 😉

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— Hugo Philion (@HugoPhilion) October 7, 2026

In Philion’s view, these two components will come as close as possible to giving the XRPL full smart contract capabilities.

How to put XRP to work right now: Flare’s approach

As evidence, Philion points to a lending market that Flare has already deployed on external platforms using FXRP.

While Ripple’s native XLS-66 model, designed for off-chain underwriting by Clearpool and Cicada, is still awaiting approval, investors have already borrowed $7.2 million in the new RLUSD stablecoin through Flare’s infrastructure, using 10.8 million wrapped XRP as collateral. This highly concentrated sector, where just three addresses currently hold 93% of the debt in Morpho pools and Sentora provides liquidity, despite RLUSD’s total supply of $2.4 billion, clearly demonstrates the potential demand.