How Flare Is Bringing XRP to DeFi

Flare is making waves by redefining XRP's role in decentralized finance (DeFi).

Leveraging its inherent data infrastructure and implementing innovative cross-chain asset protocols, Flare empowers XRP holders to engage in the burgeoning DeFi landscape, all while maintaining security and control of their tokens.

Key Highlights

• Flare's native oracle and data validation system (FTSO + FDC) facilitates secure and verifiable cross-chain operations, distinguishing Flare from other Layer-1 blockchains.
• FXRP enables XRP holders to mint a 1:1 token representation on Flare, introducing one of crypto's most liquid assets to DeFi in a non-custodial, EVM-compatible manner.
• The launch of USD₮0 stablecoin through LayerZero significantly boosted Flare's total value locked (TVL), tripling it in under two weeks.
• Flare is designed for scalability and intends to support Bitcoin, Dogecoin, and other major assets via its FAssets protocol.
• Flare's canary network, Songbird, is essential for testing updates and ensuring mainnet security.

What is Flare?

Flare (FLR) is a Layer-1, full-stack blockchain optimized for data-intensive applications and cross-chain interoperability. Its core features include:

• Flare Time Series Oracle (FTSO): Provides decentralized, on-chain data feeds natively on Flare.
• Flare Data Connector (FDC): Authenticates external blockchain data for Flare's EVM state, enabling trustless interoperability.
• FAssets: Allows the creation of fully collateralized Flare representations of non-smart-contract assets (e.g., XRP).

How FAssets Function

Unlike traditional wrapped tokens that rely on custodial agents, Flare's FAssets system is collateralized and decentralized.

Users send XRP to a registered agent of the XRP Ledger (XRPL). The agent locks collateral on Flare, and upon verification via FDC, FXRP is minted in a 1:1 ratio for the user.

The system employs multiple layers of collateral:

• 1x underlying asset (XRP)
• FLR pool collateral (typically >1.5x FXRP value)
• Stablecoin collateral (~1.2x FXRP value)
• More than 2x system collateralization for robust protection.

Multi-signature escrows, daily fund releases, and an Alert Mode in emergencies safeguard user funds. Regular audits and bug bounties further enhance security.

Songbird: Flare's Canary Network

Songbird serves as Flare's production-grade testnet, where new protocols and features (like FAssets v1.1) are tested in real economic conditions before being deployed on the mainnet.

The rapid adoption – $2 million of FXRP minted in four days – indicates strong demand and provides valuable insights for Flare's mainnet deployment.

The USDT0 Effect

The introduction of USDT0 (an omnichain version of Tether's USDT, issued via LayerZero) marked a significant milestone for Flare.

Over a 13-day period, Flare’s total value locked (TVL) surged from $37.1 million to over $120.9 million, indicating a rapid influx of liquidity and increased user engagement.

This momentum has continued, and as of June 2025, Flare’s TVL has surpassed $148 million – a testament to the platform’s growing appeal in the DeFi space.

A significant driver of this growth has been the introduction of USD₮0, which now accounts for 63% of all stablecoin liquidity on Flare.

The addition of other stablecoins like USDC and USDX has further diversified the ecosystem, reducing the platform’s reliance on any single issuer and enhancing its overall stability.

To incentivize participation, Flare launched the USDT₀ Boost program.

These initiatives have not only fueled TVL growth but have also positioned Flare as a welcoming and innovative environment for both new and experienced DeFi participants.

XRP's DeFi Opportunity

XRP's substantial liquidity and user base were previously excluded from DeFi due to XRPL's lack of smart contract support. Flare's FAssets protocol addresses this limitation.

Companies are offering significant XRP on Flare, validating the FAssets thesis and unlocking new yield opportunities for institutional investors.

stXRP and Firelight

Flare will introduce liquid staking to XRP through the Firelight protocol.

How It Works: Investors lock up FXRP in Firelight's Launch Vault and receive stXRP (an ERC-20 token) on a 1:1 basis. stXRP can be used in any DeFi protocol while the underlying FXRP is staked, earning rewards.

stXRP can serve as collateral, liquidity, or a yield-generating asset within the XRPFi ecosystem.

Beyond XRP

Flare’s vision extends beyond XRP. The FAssets protocol will soon support other major assets like Bitcoin (FBTC) and Dogecoin (FDOGE), utilizing the same trust-minimized bridge architecture to mobilize liquidity from additional ecosystems.

Flare’s Pivotal Role in DeFi’s Next Wave

Flare is positioning itself as the preferred platform for XRP-based DeFi activity, driven by its robust infrastructure, stringent security standards, and increasing institutional interest.

By connecting XRP's untapped liquidity to the programmable world of DeFi, Flare is not only enhancing XRP's utility but also promoting broader blockchain adoption.

With liquid staking and the introduction of new FAssets, the XRPFi narrative is gaining momentum. Flare's approach sets a new benchmark for cross-chain DeFi innovation.