Flare rolls out an alternative way to give XRP DeFi capabilities, without the risks of traditional blockchain bridges.
Flare (FLARE) has launched a major upgrade that will enable traders to use real XRP (XRP) tokens in DeFi. On Wednesday, May 14, Flare launched its FAssets on Songbird, bringing non-smart contract assets to DeFi, according to a note shared with crypto.news.
The network will allow users to perform complex DeFi operations with assets such as Bitcoin (BTC) and Dogecoin (DOGE). The first asset that will be available on the platform is XRP, as its associated Core Vault is now available on the XRP Ledger.
Core Vaults are a mechanism that links assets such as Bitcoin or XRP to smart contract platforms, without requiring users to give up custody over their assets. Once the collateral is locked up in these non-custodial Vaults, the smart contract automatically issues equivalent tokens such as FXRP.
“This upgrade is ultimately about giving XRP real utility. XRP is the third-largest crypto asset, excluding Tether—it’s a vast asset. It would be idiotic for us not to build a protocol that serves it. FXRP isn’t just a wrapper—it’s how XRP becomes usable in a composable DeFi world”
Hugo Philion, Co-founder and CEO of Flare.
With this upgrade, users will be able to use XRP in DeFi operations, including lending, borrowing, yield farming, and staking.
What makes Flare’s FXRP different?
The key difference between Flare’s FXRP and similar bridged assets is in the custody and security. Previously, bridged assets have been a major source of security risks in the past. Because users have to give custody over their assets to a third party, cross-chain bridges were prone to exploits and rug pulls.
According to a report by Chainalysis, cross-chain bridges accounted for over $1 billion in losses due to security breaches in 2022. Due to the custody issue, as well as the technical complexity involved, bridges accounted for 70% of all the losses in the crypto space.
