For years, XRP holders were largely shut out of decentralized finance due to the XRP Ledger’s lack of smart contract capabilities. That is finally changing.
XRP, one of the largest cryptocurrencies by market cap, has long been locked out of decentralized finance (DeFi) due to the XRP Ledger’s lack of smart contract capabilities. Now that is changing.
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Flare, a Layer-1 blockchain, is making it possible by minting FXRP, a DeFi-ready version of XRP, using its own trustless infrastructure. With a growing ecosystem built around FXRP, this development marks a pivotal moment for both retail users and institutions, according to a new report from Messari.
Why This Is Big
Flare’s technology acts as a bridge, bringing digital assets like XRP, which historically lacked smart contract capabilities, into the heart of DeFi.
Using decentralized data feeds, validating external data, and fully collateralized token models like FXRP, Flare allows XRP holders to lend, borrow, stake, and farm yield without surrendering custody of their original assets.
How It Works: The FAssets Framework
At the core of this transformation is Flare’s FAssets system, a decentralized alternative to traditional wrapped tokens that rely on central custodians.
To mint FXRP, users send XRP to a verified agent. That agent locks over 2x collateral (in FLR, XRP, and stablecoins) on the Flare network. Once the deposit is verified by Flare’s Data Connector, FXRP is minted on Flare.
A recent upgrade introduced the Core Vault, enhancing scalability by allowing agents to unlock collateral using XRP. Key security features include multi-signature control, escrow, and an emergency freeze function.
FXRP Testing Fuels XRPFi Momentum
FXRP, Flare’s DeFi-ready version of XRP, has already gone live on Flare’s testnet Songbird, hitting a $2M cap in four days.
A mainnet launch is underway, with major players such as Uphold and VivoPower committing to deploy $100 million worth of XRP, expressing interest.
At the same time, Flare’s total value locked (TVL) has jumped over 220% in two weeks, driven by the launch of USD₮0, a cross-chain Tether.
USD₮0 now accounts for over 63% of stablecoin liquidity on Flare, supported by 30% APY rewards and gas-fee rebates.
Liquid Staking for XRP Is on the Way
Additionally, XRP is getting a major DeFi upgrade. Firelight, a new protocol built on Flare, will enable users to stake FXRP and receive stXRP, an ERC-20 token that can be used across DeFi applications while still earning staking rewards.
The model is similar to Lido’s stETH. It lets XRP holders trade, lend, or provide liquidity without locking up their assets. Firelight also offers a native points system for early adopters, increasing user incentives in the evolving XRPFi ecosystem.
Why This Matters?
XRP, one of the world’s top cryptocurrencies, is finally getting its DeFi moment. With a market capitalization of over $130 billion, XRP represents a substantial pool of untapped liquidity. Even partial integration into DeFi could drive a major expansion of the decentralized finance space.
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People Also Ask:
FXRP is a decentralized, DeFi-compatible version of XRP minted on the Flare Network. It represents XRP on Flare’s blockchain and allows XRP holders to participate in decentralized finance activities like lending, borrowing, and staking without giving up custody of their original XRP.
Flare uses its FAssets framework, which mints fully collateralized tokenized versions of assets like XRP.
stXRP is a liquid staking token set to launch on Flare’s Firelight protocol. It allows users to stake their FXRP and receive stXRP in return, which they can then use in other DeFi applications while still earning staking rewards.
Unlike traditional wrapped tokens that rely on centralized custodians, FXRP is minted using a decentralized collateral model on Flare. This removes custodial risk by using overcollateralization with FLR, XRP, and stablecoins, and leverages decentralized data feeds for verification.
Yes, the FXRP system is fully collateralized and designed so users can redeem FXRP for their original XRP through verified agents, maintaining liquidity and trust in the peg.
