The Flare blockchain has introduced lending and borrowing for XRP-pegged 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 to give XRP holders more ways to earn returns and use their tokens beyond holding or trading them.
For years, XRP has had fewer decentralized finance (DeFi) options than tokens created on smart contract networks. Flare has been trying to change that by creating tools that allow XRP to be used in on-chain applications while keeping the original XRP on the XRP Ledger.
FXRP holders can now stake 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 performance products, for users who want more active strategies.
Morpho works differently than older lending apps that combine many assets into a shared pool. Each lending market is established with a collateral asset and a borrowed asset, and the rules for that market are established when it is created. This structure is intended to prevent problems in one market from spreading to others.
The first access point is Mystic, a standalone app that displays available vaults and allows users to deposit funds or borrow against collateral. Flare said more ways to access markets may be added later, including through the main Morpho app.
Some vaults are offered by independent curators, including Clearstar. These vaults include options backed by FXRP, Flare’s FLR token, and USDT0.
The launch is part of a broader push by several networks to bring lending and borrowing to large token communities that have mostly stayed outside of on-chain finance.
Read More: XRP Ledger Update Lays Groundwork for Lending and Tokenization Expansion
