XRP's DeFi Potential Unlocked: Flare Protocol Lets Holders Borrow Stablecoins

Enosys has launched the first XRP-backed stablecoin protocol on the Flare Network, introducing a decentralized lending mechanism that allows XRP holders to mint overcollateralized stablecoins without selling their assets. The platform, Enosys Loans, operates as a Collateralized Debt Position (CDP) system, enabling users to deposit Flare XRP (FXRP) and wrapped Flare (wFLR) as collateral to generate stablecoins pegged to the U.S. dollar. The protocol leverages the Flare Time Series Oracle (FTSO) for decentralized price feeds, ensuring trustless and tamper-resistant valuation of collateral assetsEnosys Launches First XRP-Backed Stablecoin on Flare Network^[1]. This marks the first integration of XRP into a stablecoin-backed borrowing framework, expanding DeFi liquidity options for XRP holdersEnosys Loans Lets Users Mint First XRP-Backed Stablecoins on …^[2].

The CDP model at the core of Enosys Loans features user-defined interest rates, allowing borrowers to choose between higher APRs for greater security or lower rates with increased risk of liquidation if the stablecoin’s value deviates from its peg. A stability pool backs the system, enabling participants to earn rewards from minting fees, interest, and liquidation proceeds. This structure ensures systemic solvency while incentivizing liquidity provisionEnosys Launches First XRP-Backed Stablecoin on Flare Network^[1]. The protocol is a fork of Liquity V2, a battle-tested Ethereum-based CDP platform known for its zero-governance design and robust peg maintenanceFirst-Ever XRP-Backed Stablecoin Loans Go Live on Flare via Enosys^[3]. By adapting Liquity’s mechanics to Flare, Enosys introduces APR customization and XRP-native collateral support, distinguishing itself from existing CDP protocolsEnosys Loans Lets Users Mint First XRP-Backed Stablecoins on …^[2].

Flare’s FTSO plays a critical role in the protocol’s security and decentralization. Unlike centralized oracles, FTSO aggregates price data from multiple signal providers, reducing censorship risks and enhancing reliability in volatile marketsEnosys Launches First XRP-Backed Stablecoin on Flare Network^[1]. This decentralized pricing mechanism aligns economic incentives across borrowers, stakers, and oracle participants, reinforcing the network’s resilience. Enosys plans to expand collateral options to include stXRP, the liquid staking token from Firelight, enabling XRP holders to simultaneously earn staking rewards and utilize their assets as CDP collateral. This dual utility mirrors Ethereum’s native staking and lending ecosystems, further integrating XRP into Flare’s DeFi infrastructureEnosys Loans Lets Users Mint First XRP-Backed Stablecoins on …^[2].

To drive adoption, Enosys will distribute rFLR incentives to users participating in key activities, including minting stablecoins, staking in the stability pool, and providing liquidity on decentralized exchanges. These rewards mirror successful strategies from protocols like Aave and MakerDAO, aiming to accelerate total value locked (TVL) growth and user engagementEnosys Loans Lets Users Mint First XRP-Backed Stablecoins on …^[2]. The protocol’s design also prioritizes composability, allowing the generated stablecoins to interact with other Flare-based DeFi applications, such as liquid staking derivatives and real-world asset bridges. This interoperability positions Enosys Loans as a foundational liquidity layer for XRP-based DeFi ecosystemsEnosys Loans Lets Users Mint First XRP-Backed Stablecoins on …^[2].

Enosys highlights the potential for its platform to evolve into a core stablecoin infrastructure akin to MakerDAO, but with XRP as the native collateral asset. Future plans include expanding support to additional Flare-native assets, such as FLR and other FAssets, to build a fully decentralized liquidity networkEnosys Loans Lets Users Mint First XRP-Backed Stablecoins on …^[2]. The launch on September 19, 2025, coincides with broader regulatory developments in the crypto space, including the U.S. GENIUS Act and EU MiCA framework. While these regulations focus on stablecoin oversight and cross-border compliance, Enosys’s XRP-backed model emphasizes permissionless access and composability within Flare’s modular architectureDOGE, XRP Get ETFs. Traders Say ‘Meh:’ Crypto Daybook Americas^[4]. Analysts suggest that the protocol’s hybrid approach—combining Ethereum’s CDP best practices with Flare’s native innovations—could position it as a leading stablecoin layer in alt-L1 DeFi ecosystemsEnosys Loans Lets Users Mint First XRP-Backed Stablecoins on …^[2].