Key takeaways
- XRP-backed loans record 883 liquidations in seven days
- Liquidators seize 4.18 million cbXRP against USDC debt
- Another $53.5 million remains borrowed against XRP collateral
XRP-backed borrowers have suffered 883 liquidation events on decentralized lending protocol Morpho, with approximately 4.18 million wrapped XRP tokens seized as falling cryptocurrency prices put leveraged positions under pressure.
The liquidations occurred between November 7 and November 13 on Coinbase's Base blockchain, where investors use cbXRP as collateral to borrow USDC stablecoins.
XRP Liquidations Reach 883 as Morpho Seizes 4.18M Tokens
The liquidation wave follows earlier warnings about XRP-backed borrowing risks, when analysts identified $8.84 million in debt that could become eligible for liquidation following another 10% collateral-price decline.
Morpho's cbXRP/USDC market uses a 62.5% liquidation loan-to-value threshold, meaning a borrower becomes eligible for liquidation when debt exceeds 62.5% of the collateral's value.
When that happens, external liquidators can repay some or all of the outstanding USDC and receive cbXRP collateral, including a liquidation incentive.
The largest daily repayment occurred November 8, when approximately $1.58 million in USDC debt was cleared. Another $1.06 million was repaid through liquidation activity on November 10.
All 883 recorded liquidation events reported zero bad debt, suggesting the seized collateral was sufficient to cover the corresponding repayments.
The figures represent liquidation transactions, not necessarily 883 individual borrowers.
$53.5M in XRP-Backed Debt Remains Outstanding
Despite the liquidations, approximately 53.53 million USDC in debt remained outstanding as of a November 13 snapshot.
That borrowing was backed by roughly 121.7 million cbXRP tokens, highlighting the size of the remaining collateral pool.
Coinbase originally introduced wrapped XRP on Base, allowing XRP holders to access Ethereum-compatible decentralized finance markets.
However, cbXRP liquidations do not automatically demonstrate selling of native XRP on exchanges.
One November 10 transaction involved approximately 202,394 USDC repaid against 218,175 cbXRP seized. The liquidator subsequently transferred those wrapped tokens to another address in exchange for USDC and wrapped ETH.
The available records do not establish whether the collateral was later redeemed for native XRP or sold on another market.
The remaining debt also does not mean every loan faces immediate liquidation.
Could More XRP Liquidations Follow?
The lending-market stress comes as XRP approaches $1 support, with recent ETF withdrawals adding to bearish sentiment.
Similar pressure has affected Bitcoin, where leveraged futures exposure has increased concerns about forced selling during sharp price declines.
Borrowers can reduce their liquidation risk by repaying debt or depositing additional collateral, although rapid market moves can leave little time to respond.
The latest figures also highlight differences between collateralized DeFi lending and the XRP Ledger's proposed unsecured lending protocol, which does not include automatic onchain collateral liquidations.
Broader cryptocurrency ETF outflows have reinforced concerns about market liquidity, although no direct connection to these Morpho liquidations has been established.
