According to Flare Network, there’s now a stablecoin backed with XRP running on Enosys Liquity V2. The announcement coincides with a new milestone for the XRP Ledger.
Enosys Brings Liquity V2 to Flare, Unlocking XRP Stablecoin
The upgrade results in increased liquidity of XRP on the blockchain and expands its utility in the decentralized finance space. Initially, the stablecoin will be pegged to XRP on Flare (FXRP) with the Wrapped Flare token (wFLR) as collateral.
Holders can then transfer staked XRP (stXRP ) and other tokenized assets to Flare (FAssets). This system operates on the model of a Collateralized Debt Position. Thus, users have the opportunity to lock their digital assets and mint a stablecoin.
The design integrates core Liquity features, including decentralized pricing from Flare’s decentralized oracle system, known as the Flare Time Series Oracle (FTSO). The Enosys Liquity V2 is an autonomous borrowing system built on Liquidity Protocol version 2.
Liquity previously used Ethereum as collateral, but Enosys has now reworked its use on Flare with XRP. This approach has already seen adoption, with Everything Blockchain tapping Flare’s XRP DeFi framework for its crypto treasury.
Users can lock their assets in XRP and create stablecoins. This is made possible through Locked Asset Loans, Safety Funds, and Blockchain Price Feeds. Using these methods ensures that the stablecoin remains secure, transparent, and reliable.
Stablecoin Creates Greater Value as XRPL Accounts Surpass 7 Million
With the introduction of this model on Flare, Enosys has launched the first on-chain debt protocol that works with XRP as collateral. The stablecoin gives XRP holders an additional use for their token.
Investors can also use their tokens to issue stablecoins instead of selling them for cash. The stablecoins generated from the XRP can be used for multiple purposes, such as payments, lending, trading, or earning interest in DeFi. The XRP Ledger is also emerging as a global settlement layer for stablecoins, strengthening its role in broader financial applications.
Such stablecoins can also be used to purchase NFTs, according to the CEO of Flare, Hugo Philion. Philion further stated that this enables the coin to be utilized in the digital economy.
The process unlocks liquidity while still allowing holders to retain long-term exposure to XRP. Participants will also gain reward Flare tokens (rFLR). This adds an incentive for adoption within the ecosystem.
The stablecoin launch comes at a time of expanding XRP network usage. Data from XRPScan shows that the number of active accounts on XRPL has crossed 7 million. This milestone highlights rising adoption across the ledger.
Source: https://coingape.com/flare-unveils-first-xrp-backed-stablecoin-boosting-xrps-utility/
