Despite its significant market capitalization exceeding $130 billion, XRP has remained largely excluded from decentralized finance (DeFi) due to the technical limitations of the XRP Ledger (XRPL).
XRPFi, a new DeFi ecosystem centered on XRP, aims to overcome this gap. It leverages Flare Network’s bridging technology and smart contract capability, bringing XRP into programmable finance.
Flare Network, a full-stack layer-1 blockchain, serves as a crucial bridge between non-smart-contract assets like XRP and the DeFi ecosystem. At its core is FAssets, creating fully collateralized representations of these assets.
FXRP, a wrapped version of XRP, enables holders to deploy their XRP within Flare’s DeFi protocols. Staking FXRP yields stXRP, a liquid staking token.
Max Luck, head of growth at Flare, stated regarding this setup: “This setup allows XRP holders to unlock native-like staking yields on an asset that otherwise doesn’t support staking, enabling passive income without sacrificing liquidity.”
Institutions are increasingly showing interest: Digital money platform Uphold, which holds over 1.8 billion XRP, is planning to engage with the FAssets ecosystem, while NASDAQ-listed VivoPower recently announced a $100 million XRP deployment on Flare, highlighting major institutional validation and accelerating XRPFi momentum.
Building the future of DeFi with Flare’s data-driven ecosystem: AMA recap
Directing even a fraction of XRP’s substantial liquidity into DeFi could unlock a significant new capital source for the broader ecosystem. Flare’s technology expands XRP’s utility, encouraging greater participation from both institutional investors and retail holders.
Liquid Staking Arrives for XRP via the Launch of stXRP
Liquid staking is set to debut in the XRP ecosystem through the launch of stXRP on Firelight, powered by Flare. Similar to liquid staking tokens like stETH, Firelight allows users to stake FXRP and receive stXRP.
By depositing FXRP into Firelight’s Launch Vault, users obtain stXRP at a 1:1 ratio. These ERC-20 tokens are transferable and usable in Flare’s DeFi ecosystem.
The underlying FXRP remains staked on Secured Service Networks (SSNs). Holders of stXRP may additionally earn Firelight Points, which could influence future reward distributions.
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