Folks Allocates $10M to Drive xChain V2 Adoption, Aims for $1B TVL

Folks Finance, a leading crosschain lending protocol, announced the upcoming release of xChain V2 in the first half of 2026. The upgrade aims to simplify crosschain DeFi and introduce new features such as vault-based loans and support for both EVM and non-EVM ecosystems according to the announcement. The company will allocate 1 million FOLKS tokens, valued at around $10 million, to incentivize users as the platform works toward a $1 billion total value locked (TVL) goal as reported.

The new version of xChain builds on the success of the first iteration and expands the utility of the FOLKS token. This is part of a broader strategy to make DeFi more accessible to mainstream users. The upgrade also includes integration with the upcoming Folks Mobile app, enabling users to borrow against their collateral and use the funds via a debit card in the real world as per the update.

xChain V2 represents a major step in Folks Finance's development. With over a year of experience as the leading crosschain lending protocol on mainnet and a proven track record across eight chains, the company is well-positioned to deliver an advanced upgrade. The goal is to turn complex DeFi mechanisms into user-friendly tools that can be used both onchain and in daily life according to the company's statement.

Key Features of xChain V2

The xChain V2 upgrade focuses on simplifying crosschain DeFi for users. It removes the traditional complexity associated with crosschain interactions, offering a more streamlined experience as reported. The platform now supports both EVM and non-EVM ecosystems, making it more versatile for a wider audience. This broad compatibility is a key factor in expanding DeFi's reach and usability across different blockchain networks.

Vault-based crosschain loans are another major feature introduced with xChain V2. These vaults allow users to access curated crosschain yield strategies through a single interface. This is a significant improvement over previous iterations, which required users to manage multiple platforms and transactions across chains.

The upgrade also includes integration with the Folks Mobile app, which will enable real-world spending through debit-card-based borrowing. This feature allows users to leverage their crypto collateral while maintaining exposure to yield-generating strategies according to the announcement. The ability to spend borrowed funds in everyday transactions marks a major step toward mainstream adoption of DeFi.

Market Implications and Future Plans

With xChain V2, Folks Finance is positioned to further cement its leadership in the crosschain lending space. The $10 million incentive program will help drive user adoption and liquidity as the platform scales toward a $1 billion TVL target according to the company. By simplifying crosschain lending and introducing new utility for the FOLKS token, the company is creating a compelling value proposition for both retail and institutional users.

The FOLKS token's utility is expected to expand with the V2 launch, although specific details have not yet been announced. As development progresses, the company plans to share more information about tokenomics, governance, and other features tied to the FOLKS token as stated in the update.

The release of xChain V2 also aligns with broader industry trends in DeFi innovation. Other projects, such as Mutuum Finance and Sei, are similarly working to bring DeFi into the mainstream by improving user experience and expanding real-world use cases as noted in industry reports. With xChain V2, Folks Finance is contributing to this movement by making advanced DeFi tools more accessible to everyday users.

What This Means for Investors

For investors, the xChain V2 upgrade represents a significant milestone for Folks Finance. The $10 million incentive program and focus on mainstream adoption suggest a strong growth trajectory for the platform. As the project moves closer to its $1 billion TVL target, the value of the FOLKS token could be positively impacted by increased usage and demand according to market analysis.

The integration of real-world spending through the Folks Mobile app also opens new revenue streams and use cases for the protocol. By bridging the gap between DeFi and traditional finance, the company is addressing one of the biggest challenges in the industry: mass adoption. This could lead to increased user engagement and long-term growth for the platform.

Investors are also likely to watch how the FOLKS token's utility evolves alongside the V2 launch. As more features are added to the token, it could gain more value and attract new investors. The company has not yet shared full details on these plans, but it has indicated that more information will be released as development progresses as confirmed by the company.