XRP DeFi: Flare Network Bridges XRP to Institutions
XRP Enters the DeFi World with Flare Network
Despite its popularity, XRP's absence from decentralized finance (DeFi) was largely due to the XRP Ledger's (XRPL) technical limitations. XRPFi, a DeFi ecosystem built around XRP, is changing that. By leveraging Flare Network's bridging and smart contract technology, XRPFi brings XRP into the world of programmable finance.
Flare Network, a layer-1 blockchain designed for data-intensive applications, acts as a crucial bridge connecting non-smart-contract assets like XRP to DeFi. At the core of Flare's infrastructure is FAssets, a system generating fully collateralized representations of these assets. FXRP, a wrapped version of XRP, is a prime example, allowing users to deploy their XRP in DeFi protocols on Flare's network.
Staking FXRP earns users stXRP, a liquid staking token representing their staked FXRP. As Max Luck, Flare's Head of Growth, explains, "This allows XRP holders to earn staking yields on an asset that doesn't natively support staking, generating passive income without sacrificing liquidity."
Institutional Interest in XRPFi
XRPFi is attracting significant institutional attention. Uphold, holding over 1.8 billion XRP, plans to engage with the FAssets ecosystem. NASDAQ-listed VivoPower's $100 million XRP deployment on Flare further validates XRPFi's momentum.
With XRP's market cap exceeding $130 billion, even a small portion shifting to DeFi could significantly boost the ecosystem. Flare's technology enhances XRP's utility, attracting both institutional and retail investors.
Liquid Staking Arrives for XRP with stXRP
The launch of stXRP on the Firelight protocol, powered by Flare, introduces liquid staking to the XRP ecosystem. Similar to stETH, users stake FXRP to receive stXRP, a liquid token usable across Flare's DeFi ecosystem.
Users deposit FXRP into Firelight's Launch Vault, receiving stXRP at a 1:1 ratio. These ERC-20 tokens are transferable and can be used on decentralized exchanges, lending markets, and other DeFi platforms. The underlying FXRP remains staked on Secured Service Networks (SSNs), potentially earning users rewards.
stXRP holders can earn Firelight Points, influencing future reward distributions. This increases stXRP's composability within XRPFi, enabling its use as collateral, liquidity, or a yield-bearing asset.
Codeum Note: Codeum offers comprehensive blockchain security and development services, including smart contract audits, KYC verification, custom smart contract and DApp development, tokenomics and security consulting, and partnerships with launchpads and crypto agencies. We help projects like Flare ensure the security and scalability of their innovative DeFi solutions.