Flare Founder Says Don’t Put Your XRP in ‘Black Box’ Vaults Under Any Circumstance

Flare Network co-founder Hugo Philion has warned XRP holders not to deposit their tokens into opaque platforms that promise yield or staking rewards.

In a post on X, Philion said, “Do not put your XRP in black boxes like some vaults that exist now, under any circumstances.”

‘Black Box’ Vaults

While he didn’t name any specific platforms, his comments target certain centralized or semi-transparent vault services that claim to offer XRP yield opportunities without clear operational transparency.

In response, other community members shared various platform names they believe Philion was referring to.

Recent Crash in DeFi Staking

Notably, the caution comes as Stream Finance announced on November 4 that an external fund manager overseeing its assets had disclosed a loss of approximately $93 million in Stream fund assets. Accordingly, Stream suspended withdrawals and deposits and canceled pending deposits.

Market watchers said the Stream Finance case is another episode similar to Celsius, and people seldom learn from past occurrences.

Meanwhile, Philion highlighted that Flare aims to provide a safer and more transparent alternative through decentralized finance built specifically for the XRP community.

“Flare is the transparent DeFi domain for XRPFI,” he added, referencing the protocol’s ongoing work to integrate XRP functionality with decentralized protocols.

XRP DeFi on the Rise, But Tread with Caution

Indeed, DeFi activity around XRP has increased recently as developers explore tokenized staking. Notably, Flare’s ecosystem is leading the charge via its FXRP initiative, which has seen inflows of over $150 million in XRP months after launching.

At the same time, other platforms are also promoting XRP DeFi. However, Philion’s statement stresses that not all platforms advertising XRP-related yield are trustworthy, especially those that conceal how they handle user funds.

In September, XRP commentator Digital Asset Investor announced that he was opting out of current 8–10% yield offerings, citing security concerns over the high returns. He said he prefers sacrificing some yield for insurance to protect his holdings. And until such coverage exists, he’s “sitting on the sidelines.”

His caution highlights lessons from past financial disasters, from Ponzi and Madoff schemes to the 2008 mortgage crisis and recent crypto collapses like Celsius and Anchor. These cases show that high yields often mask serious risks.

For XRP investors, the takeaway is that transparency matters, and investors must do due diligence before engaging with any project promising easy returns.