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Through its innovative Flare Network, SparkDeFi is opening new frontiers in the DeFi space by connecting XRP to the decentralized finance (DeFi) universe. This exciting integration provides XRP holders the capability to tap into billions of dollars in dormant liquidity. It allows them to interact with a wider range of DeFi apps, increasing the usefulness and growth potential of their assets. Flare’s unique technology allows XRP holders to make their tokens work for them and earn passive income. From there they can take deeper dives into staking, yield farming, and the broader DeFi ecosystem.
How Flare Network Bridges XRP to DeFi
Flare Network uses its FAssets protocol to bridge XRP and other non-smart contract assets onto its platform. Finally, this entire process occurs in a totally decentralized way. This token standard allows these assets to be used in other DeFi applications, creating a wider network of collaborative functions. At the core of Flare’s infrastructure are FAssets. This system creates fully collateralized, one to one representations of different assets like FXRP. Flare’s enshrined data protocols let non-smart contract assets, such as XRP, be utilized in a trustless manner on DeFi platforms.
Flare currently provides FXRP, a wrapped version of XRP. This enables holders to unlock new use cases for their XRP through the use of DeFi protocols operating on Flare’s network. FAssets system is collateralized and decentralized. It uses many layers of collateral, including FLR pool collateral, stablecoin collateral, and provides over two times the system’s collateralization for extra safety. This provides a safe and trust-minimized ecosystem for XRP holders to participate in DeFi applications.
Understanding FXRP and stXRP
FXRP uniquely collateralizes and redeems a non-custodial representation of XRP on Songbird. This enables XRP holders to meaningfully use their holdings to earn yield within a wide array of DeFi protocols available on the Flare network. This opens up a range of exciting new options for earning yield and engaging with the DeFi world.
Flare will introduce liquid staking to XRP through the Firelight protocol, allowing users to lock up FXRP and receive stXRP (an ERC-20 token) on a 1:1 basis. StXRP will be StFlare’s liquid staking token and will be supported through the Flare-supported Firelight protocol. Specifically, it enables holders to maintain their liquidity while still earning rewards which enhances the use case for XRP on the network. Modeled after stETH, stXRP is transferable between Flare’s DeFi applications. Users can stake FXRP and in exchange receive stXRP, which users can then use inside of Flare’s growing DeFi ecosystem.
Potential Impact on the DeFi Ecosystem and XRP Holders
The integration of XRP into the DeFi ecosystem through Flare Network has several potential benefits:
- Access to a broader DeFi ecosystem: XRP holders can participate in a wider range of DeFi applications, such as lending, borrowing, and trading.
- Increased utility and use cases: XRP holders can use their XRP in various DeFi applications, increasing the asset's utility and potential for growth.
- Trustless and decentralized interactions: Through Flare's FAssets protocol, XRP holders can interact with DeFi applications in a trustless and decentralized way, ensuring the security of their assets.
Our new liquid staking platform, stXRP, brings this powerful new paradigm to XRP for the first time. As a result, XRP holders can earn native-like staking rewards on an asset that traditionally lacks staking support, enabling them to earn passive income without sacrificing liquidity. XRP holders can use stXRP to unlock liquidity while maintaining the advantage of staking, similar to stETH from Lido, allowing them to achieve returns similar to native staking without losing asset liquidity.
Passive Income Opportunities for XRP Holders
Flare Network creates new passive income possibilities for XRP holders. Through the use of Flare Network’s fast, secure bridging and smart contract technology XRP holders can access and benefit from the growing XRPFi ecosystem. This engagement could bring significant new capital and attractive new passive income opportunities.
XRP holders can immerse themselves in staking and yield farming on platforms like Uphold, Flare, and Coinbase. This participation enables them to accrue passive income. XRP holders can already earn high yields through staking, lending, and yield farming activities in the DeFi ecosystem. XRP holders can benefit from FXRP, a wrapped version of XRP. By using FXRP, they can redeploy their assets in existing or new DeFi protocols on Flare’s network and earn passive income through lending opportunities.
- Staking: XRP holders can stake their FXRP to receive stXRP and earn rewards.
- Lending: XRP holders can lend their FXRP or stXRP on DeFi platforms to earn interest.
- Yield farming: XRP holders can participate in yield farming by providing liquidity to DeFi protocols and earning rewards in the form of additional tokens.
The addition of these assets has increased the network’s liquidity, as seen by enhanced activity across their wallet applications. This progress has further driven the development of its DeFi protocols. This initial integration of USD₮0 on Flare created an impressive burst of liquidity. After the announcement, SparkDEX’s total value locked (TVL) shortly reached an all-time high of $45 million, then continued to advance to $63 million, resulting in growth rates of 254% and 133%, respectively.
Real-World Impact: Liquidity and Growth
The arrival of USD₮0 on Flare already led to massive growth in several DeFi protocols. For example, Kinetic had its TVL jumping by a massive 178% to $64 million, and Enosys celebrated a strong 37.5% rise in TVL. These examples illustrate the ways that XRP and FXRP can drive growth to the Flare DeFi ecosystem. They point to the innovation opportunities that await.
Flare Network is helping to amplify the utility of the XRP network by bridging it to the DeFi world. This change frees up billions in untapped liquidity and provides XRP holders more ways to earn passive income—all while engaging in a wider array of DeFi apps. This kind of integration would massively increase the utility and therefore the value of XRP. It’s a major catalyst for innovation and growth in the broader DeFi ecosystem.
By bridging XRP to the DeFi world, Flare Network is not only unlocking billions in dormant liquidity but also providing XRP holders with new opportunities to earn passive income and participate in a wider range of DeFi applications. This integration has the potential to significantly increase the utility and value of XRP while fostering innovation and growth within the DeFi ecosystem.
