The Flare blockchain introduced lending and borrowing of XRP-linked assets through an integration with Morpho, a crypto lending protocol that runs on multiple Ethereum-compatible chains.
The update allows users to lend and borrow with FXRP, a version of XRP designed for use on Flare, the team behind the blockchain said on Monday. Flare presented the move as a step toward giving XRP holders more ways to earn yield and use their tokens beyond holding or trading.
For years, XRP has had fewer decentralized finance (DeFi) options than tokens built on smart contract networks. Flare has tried to change this by creating tools to use XRP in on-chain applications while keeping the original XRP on the XRP Ledger.
FXRP holders can now deposit their tokens to earn interest, or use FXRP as collateral to borrow other assets such as stablecoins.
Flare said these positions can also be combined with other network features, including staking and yield products, for users who want more active strategies.
Morpho works differently from older lending apps that mix many assets into a single shared pool. Each lending market is made up of a secured asset and a borrowed asset, and the rules for that market are set when it is created. This structure aims to prevent problems in one market from spreading to others.
The first access point is Mystic, a separate app that displays available vaults and allows users to deposit funds or borrow against collateral. Flare said other ways to access markets could be added in the future, including through Morpho’s main app.
Some safes are offered by independent curators, including Clearstar. These vaults include options backed by FXRP, Flare’s own FLR token, and USDT0.
This deployment is part of a larger initiative by several networks to provide loans and borrowing to large token communities that have mostly remained outside of on-chain finance.
Read more: XRP Ledger upgrade lays foundation for lending and tokenization expansion
