Flare’s Overcollateralized FXRP: Why XRP’s DeFi Debut Stands on 2x Security

Flare Network has launched FXRP, a non-custodial, overcollateralized tokenized version of XRP, enabling the asset to participate in decentralized finance (DeFi) applications. This marks the first live deployment of Flare’s FAssets system, which converts non-smart contract tokens like XRP into collateralized assets compatible with DeFi protocols. FXRP is a 1:1 representation of XRP, backed by a system of independent agents and Flare’s native data protocols, including the Flare Time Series Oracle (FTSO) and Flare Data Connector (FDC). The launch positions XRP as a collateral, liquidity, and yield-generating asset within DeFi ecosystemsXRP Lands on Flare: Will DeFi Save XRP Price in October?^[7].

The FAssets system operates through a multi-sig-controlled liquidity reserve known as the Core Vault, which allows agents to deposit XRP and unlock collateral in the form of FLR (or SGB on Songbird). Users can mint FXRP by sending XRP to an agent’s address and providing collateral, which is verified via Flare’s data protocols. The system maintains a 2x overcollateralization ratio, ensuring security against price volatility. FAssets v1.1 also introduces unlimited minting of FXRP, enhancing capital efficiency and scalabilityFlare Network launches FXRP to let XRP be used in DeFi apps^[6].

Initial minting of FXRP is capped at 5 million tokens in the first week, with gradual increases planned. Users can acquire FXRP through decentralized exchanges (DEXes) like SparkDEX, BlazeSwap, and Enosys, or via wallets such as Luminite and Oxen Flow. To incentivize liquidity, Flare is distributing rFLR rewards, with liquidity pools targeting annual percentage rates (APRs) of up to 50%. Additionally, collateralized borrowing options are being introduced to expand FXRP’s utilityXRP Lands on Flare: Will DeFi Save XRP Price in October?^[7].

Security is a core focus for Flare, with FAssets undergoing audits by Zellic and Coinspect. The system is supported by bug bounty programs and 24/7 monitoring by Hypernative. Flare emphasizes protocol-level verification rather than custodial models, reducing trust assumptionsXRP Lands on Flare: Will DeFi Save XRP Price in October?^[7]. Future integrations include stXRP from the Firelight project, enabling FXRP to serve as collateral for loans and yield-generation strategies within curated vaultsFlare launches FXRP, enabling XRP as collateral, liquidity, and yield …^[9].

Market analysts note that FXRP’s launch could influence XRP’s price trajectory. Current technical analysis indicates XRP has rebounded from key support levels, with momentum indicators showing renewed buyer interest. A daily close above $2.95 could strengthen the bullish case, with resistance targets at $3.20–$3.30Flare Launches FXRP to Unlock XRP's DeFi Potential^[8]. While FXRP itself does not generate yield, its deployment in lending, liquidity provision, and staking protocols could drive broader adoption of XRP in DeFiXRP Lands on Flare: Will DeFi Save XRP Price in October?^[7].

Flare’s FLR token has seen a nearly 8% increase in the past 24 hours, trading at $0.03 with a $1.9 billion market cap. The network’s TVL (total value locked) has been trending upward, reflecting growing on-chain activity. As FXRP adoption progresses, Flare aims to expand its FAssets system to include wrapped versions of Bitcoin and Dogecoin, further diversifying its DeFi offeringsXRP Lands on Flare: Will DeFi Save XRP Price in October?^[7].