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Ripple earns financing fees by providing institutional funds with leveraged exposure to stocks through total return swaps. In one example reported by CoinDesk on Oct. 8, 2026, the Tradr 2X Long SNDK Daily ETF pays Ripple the overnight bank funding rate plus four percentage points on its swap exposure—estimated at roughly 8% annualized at rates prevailing that day. That was a reported deal, not a standard rate for every Ripple Prime client.
How Ripple Prime earns a financing fee
Ripple Prime is an institutional, non-bank prime broker—not a bank or a retail brokerage. Its service brings trading, clearing, financing, and risk management together for institutional clients, according to Ripple’s product description.
One way a fund can gain stock exposure without buying the full position directly is a total return swap. The fund receives the return on an agreed stock or index exposure; the prime broker arranges that exposure and charges a financing fee. Ripple describes its Delta One products as providing an asset’s return without the client directly holding the asset, typically through a total return swap.
The Sandisk ETF example
CoinDesk reported that Tradr 2X Long SNDK Daily ETF, which targets twice Sandisk stock’s daily movement, uses a total return swap for exposure and pays Ripple the overnight bank funding rate plus four percentage points on that swap exposure. CoinDesk estimated the resulting rate at roughly 8% annualized based on rates prevailing on Oct. 8, 2026. The financing charge is separate from the ETF’s management fee, and neither the formula nor estimate establishes a rate for other clients or transactions.
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The structure lets the fund obtain amplified exposure through a contract rather than purchasing twice its assets in Sandisk shares. The fund’s daily leverage target and the swap financing cost are distinct: the target describes the fund’s intended daily market exposure, while the financing fee compensates the broker for providing the exposure.
What Ripple Prime offers institutions
Ripple says Ripple Prime covers digital assets, foreign exchange, listed derivatives, swaps, and fixed income, and offers portfolio and risk-based margin financing. It also describes cross-margining across asset classes, in which a client can use a shared pool of collateral. Those are company descriptions of the offering; they are not independent measurements of capital savings or performance.
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Ripple acquired multi-asset prime brokerage Hidden Road for $1.25 billion, with the business operating as Ripple Prime after the acquisition closed in October 2025, according to CoinDesk. Ripple’s Nov. 3, 2025 announcement about its U.S. institutional offering described OTC spot trading and the ability to cross-margin digital-asset spot holdings with OTC swaps and CME futures and options. That broader platform context does not establish that the Sandisk ETF swap uses XRP or the XRP Ledger.
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Why a non-bank is competing in a bank-led business
Banks have historically supplied much of the financing for leveraged investment positions. CoinDesk reported that tighter capital and risk requirements have created room for non-bank providers, including Ripple Prime, Jane Street, and Clear Street. The comparison is about a financing function; Ripple Prime is not itself a bank.
Ripple says its non-bank structure avoids bank capital constraints. That is the company’s framing, not an independent finding that Ripple faces no relevant regulation, risk limits, or funding constraints. The sources do not provide equivalent contracts or pricing for bank competitors, so they do not support a like-for-like cost comparison.
Scale and revenue figures—and what they do not show
Morningstar Direct data cited by CoinDesk counted 593 leveraged ETFs holding more than $256 billion, including 426 funds tracking individual stocks. Those figures indicate a substantial market for leveraged ETF exposure; they do not measure Ripple Prime’s share of that market.
In a May 11, 2026 announcement, Ripple said Ripple Prime revenue had tripled year over year since the 2025 acquisition and announced a debt facility of up to $200 million from funds managed by Neuberger Specialty Finance to expand client financing capacity. The facility amount is its stated maximum, not proof that the full amount was drawn. Ripple did not break out how much revenue came specifically from financing leveraged ETFs.
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Daily-reset leveraged funds can be vulnerable to sharp moves in their underlying stocks. Such moves can leave a financing firm exposed if a fund’s assets are insufficient to cover losses. The available reporting does not state the collateral, margin-call, or close-out terms for the cited Sandisk ETF swap, so the exact allocation of risk between the fund and Ripple cannot be established from the public example.
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CoinDesk also reported that Ripple has not disclosed what proportion of this financing activity uses XRP or the XRP Ledger. Ripple’s separate institutional digital-asset products and cross-margining descriptions are not evidence that the stock-swap example is powered by or backed with XRP.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Related tokenised-collateral initiative is exploratory
Ripple, DBS, and Franklin Templeton announced a memorandum of understanding in September 2025 involving tokenised money-market funds and RLUSD. DBS said it would explore allowing sgBENJI fund units to serve as collateral for bank credit or third-party lending. This was an announced, exploratory use case, not evidence that leveraged stock financing runs on-chain or that such lending is generally available.
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