XRP's DeFi Revolution: Stablecoin Enables Holders to Trade Without Liquidating

Flare Network has introduced the first stablecoin secured by XRP, representing a notable advancement in expanding XRP’s role in decentralized finance (DeFi). This stablecoin is developed on Enosys’

V2 protocol, using as collateral and employing Flare’s Flare Time Series (FTSO) for decentralized price feeds. This innovation allows XRP holders to generate stablecoins without the need to liquidate their assets, maintaining their investment while gaining access to liquidity for DeFi uses such as lending, trading, and staking Flare Unveils First XRP-Backed Stablecoin, Boosting XRP’s Utility [ 1 ]. The framework is built on Collateralized Debt Positions (CDPs), enabling participants to lock up XRP or other tokenized assets to mint stablecoins. At launch, the stablecoin is anchored to XRP on Flare (FXRP) with Wrapped Flare tokens (wFLR) as backing, with plans to later support staked XRP (stXRP) and additional FAssets.

This launch happens as the XRP Ledger (XRPL) sees increased adoption, now boasting over 7 million active accounts Flare Unveils First XRP-Backed Stablecoin, Boosting XRP’s Utility [ 1 ]. This achievement highlights the growing trust in XRP as a base for stablecoins and DeFi projects. Flare CEO Hugo Philion pointed out the stablecoin’s role in maximizing XRP’s value throughout the digital economy, including areas like NFT trading and decentralized lending Flare Unveils First XRP-Backed Stablecoin, Boosting XRP’s Utility [ 1 ]. The protocol also encourages user involvement through incentives such as reward Flare tokens (rFLR), aiming to accelerate adoption within the ecosystem.

Enosys’ adaptation of the Liquity V2 protocol incorporates essential features like stability pools and pricing powered by FTSO, guaranteeing transparency and security. The platform enables users to produce stablecoins while retaining exposure to changes in XRP’s price. By adapting Liquity’s Ethereum-based system for Flare, Enosys has broadened XRP’s utility in DeFi, making scalable liquidity and cross-chain connectivity possible Flare Unveils First XRP-Backed Stablecoin, Boosting XRP’s Utility [ 1 ]. The stablecoin’s foundation supports Flare’s mission to turn XRP into a DeFi-compatible asset, reinforced by collaborations with organizations such as Everything Blockchain and BitGo Flare Unveils First XRP-Backed Stablecoin, Boosting XRP’s Utility [ 1 ].

The introduction of this stablecoin has already made an impact on Flare’s DeFi ecosystem. The Total Value Locked (TVL) has climbed past $85 million, fueled by expanding stablecoin liquidity and the debut of USD₮0, an omnichain stablecoin backed 1:1 by Ethereum-based

. This advancement empowers XRP holders to establish substantial trading pools and back loans with collateral, while accessing $140 billion in USDT liquidity Flare price rockets 10% amid growing XRP DeFi use … [ 2 ]. The Flare network’s growth in TVL and its increasing spot volume—now over $19.5 million—have led to a 10% rise in the FLR token’s value, showcasing market optimism toward the platform’s capabilities Flare price rockets 10% amid growing XRP DeFi use … [ 2 ].

Experts emphasize the strategic value of integrating XRP into the DeFi space. By enabling holders to tap into liquidity without selling their XRP, the stablecoin resolves a major challenge for tokens without smart contract capabilities. The CDP approach ensures that stablecoins remain overcollateralized, reducing risk and helping maintain their pegged value. Leveraging FTSO for price data also reduces dependence on centralized sources, strengthening both security and decentralization. As the use of XRP grows, this stablecoin has the potential to reinforce the XRPL’s position as a global platform for cross-chain financial solutions Flare Unveils First XRP-Backed Stablecoin, Boosting XRP’s Utility [ 1 ].