Overview
- Recent reporting identified the Tradr 2X Long SNDK Daily ETF as a Ripple Prime client that pays the overnight bank funding rate plus four percentage points for financing.
- Ripple Prime supplies total return swaps that let leveraged ETFs get twice or more of a stock’s daily return without buying double the shares, and it earns financing fees for providing that exposure.
- Ripple built the capability after buying Hidden Road for $1.25 billion, launching a Delta One business and raising balance-sheet capacity with a $275 million senior note sale and a $200 million facility from Neuberger Berman.
- The business takes on familiar risks for financing providers because leveraged ETFs reset daily, which can magnify losses and create sudden collateral shortfalls if markets move sharply.
- Public disclosures show Ripple has added stablecoin and post-trade plans to its services, but reporting does not confirm that RLUSD or XRP are used in the disclosed leveraged-ETF financing arrangements and this shift could redistribute market share from banks to nonbank brokers.