The ON RRP is the mirror of the standing-repo-facility. Rather than lending cash, the Fed takes it in, paying a set rate against Treasury collateral. No investor will lend to the private market below a rate they can get risk-free from the Fed, so the facility puts a floor under sofr and effr.
Balances at the facility are a useful gauge of excess cash in the system. A large and falling balance usually means quantitative-tightening is being absorbed without draining bank-reserves.
Example: the ON RRP rate is 5.30% and balances fall from $2.2 trillion to $400 billion over a year. That drain, not reserve scarcity, absorbed most of the Treasury bill supply issued after a debt-ceiling resolution.
Related: reverse-repo, standing-repo-facility, iorb, bank-reserves, quantitative-tightening