Enosys Builds XRP's DeFi Backbone with Stablecoin Protocol, Echoing MakerDAO's Ethereum Legacy

Enosys has launched Enosys Loans, a decentralized lending protocol on the Flare Network, introducing the first XRP-backed stablecoin through a fork of Liquity V2. This protocol enables XRP holders to mint a trustless, overcollateralized stablecoin without selling their tokens, leveraging Flare’s interoperability and decentralized infrastructure. The stablecoin, initially pegged to the U.S. dollar and backed by Flare XRP (FXRP) and wrapped Flare (wFLR), is designed to expand to staked XRP (stXRP) and other Flare-native assets in the future. The platform operates via Collateralized Debt Positions (CDPs), where users lock assets as collateral to generate stablecoins, maintaining a 1:1 peg through dynamic interest rates and a stability pool.

The protocol integrates Flare’s Time Series Oracle (FTSO), a decentralized pricing mechanism that aggregates data from multiple providers to ensure transparency and resistance to manipulation. This system replaces centralized oracles, aligning with Flare’s vision of a trustless financial infrastructure. Borrowers can set their own annual percentage rates (APRs), balancing risk and reward. If stablecoin values dip below $1, lower-APR loans are prioritized for liquidation, ensuring system solvency. Stability pool participants earn yield from mint fees, interest, and liquidation bonuses, incentivizing liquidity provision.

Enosys Loans marks a significant milestone for XRP’s utility, transforming it from a reserve asset into a collateral layer for decentralized finance (DeFi). XRP holders can now access liquidity, generate yield, and participate in DeFi activities without divesting their holdings. The Flare Network, which supports 7 million active XRP Ledger accounts, positions itself as a bridge between traditional and decentralized finance. By integrating liquid staking derivatives like stXRP, the protocol further enhances XRP’s composability, enabling dual utility for staking and borrowing.

The launch builds on Liquity V2’s proven model, which has secured billions in collateral on Ethereum. Enosys adapted the framework to Flare, introducing user-defined borrowing rates and protocol-driven liquidity incentives. This hybrid approach combines Ethereum’s risk management principles with Flare’s modular architecture, offering a scalable solution for XRP-based DeFi. Early adopters benefit from rFLR token rewards, distributed to users minting stablecoins, staking in the stability pool, or providing liquidity to decentralized exchanges.

Looking ahead, Enosys plans to expand collateral options to include Flare’s native token (FLR) and other FAssets, broadening the platform’s reach. The protocol aims to integrate with Flare’s DeFi ecosystem, supporting applications like stablecoin swaps, leveraged trading, and real-world asset bridges. As XRP’s role in decentralized finance evolves, Enosys Loans could serve as a foundational layer for a broader XRP-based economy, akin to MakerDAO’s role in Ethereum’s DeFi stack.