Bridging XRP and DeFi: Flare’s FXRP Unlocks Liquidity and Yield

Flare Network has launched FXRP, a wrapped version of XRP designed to integrate the digital asset into decentralized finance (DeFi) ecosystems. This development enables XRP holders to use their tokens as collateral, liquidity, and yield-generating instruments within DeFi protocols. FXRP is a one-to-one representation of XRP, backed by an overcollateralized system involving independent agents and Flare’s native data protocols. The token can be minted via self-custody wallets like Ledger or Bifrost and converted using tools such as AU or Oracle Daemon. Initial minting is capped at 5 million FXRP weekly, with gradual increases planned.

The launch has already attracted significant liquidity, with over $7.1 million in XRP locked in Flare’s vault within hours of the rollout. Institutional adoption is also emerging, with firms like Uphold and Nasdaq-listed VivoPower signaling participation in the FAssets ecosystem. Flare’s FAssets protocol, which underpins FXRP, has undergone multiple audits and employs a decentralized model secured by real-time pricing data from the Flare Time Series Oracle (FTSO) and Flare Data Connector (FDC).

To incentivize adoption, Flare is distributing rFLR tokens to liquidity providers. Key pools, such as Kinetic FXRP supply and FXRP/USDT₮0 pairs on decentralized exchanges like SparkDEX and Enosys, target annual percentage rates (APRs) of up to 50%. These incentives aim to drive on-chain activity and total value locked (TVL) in the Flare ecosystem. Additionally, Flare plans to introduce liquid staked XRP (stXRP) via the Firelight protocol, allowing users to stake FXRP for yield while retaining liquidity.

The integration of XRP into DeFi is expanding its utility beyond cross-border payments. Flare has also launched an XRP-backed stablecoin through a partnership with Enosys Loans, enabling users to borrow stablecoins using FXRP or Flare’s native token (wFLR) as collateral. This system operates via a collateralized debt position (CDP) model, with a stability pool incentivizing participants through fees and liquidations.

Market analysts have highlighted potential implications for XRP’s price trajectory. Recent data shows XRP trading near $2.87–$2.90, with technical indicators suggesting a “retest and pump” pattern as buyers defend key support levels. Analysts note that a sustained move above $2.95 could reinforce bullish momentum, while a breakdown below $2.80 risks renewed selling pressure. However, the token’s DeFi integration may provide a structural tailwind by unlocking new use cases for institutional and retail investors.

Despite optimism, risks persist. XRPL validator Vet_X0 has warned that yield-generating opportunities inherently carry volatility, with some projects potentially failing or exiting abruptly. Flare’s co-founder Hugo Philion acknowledged these risks but emphasized the project’s long-term vision, including broader integrations and DeFi applications over the next 12 months.