Flare unveils new way for XRP holders to earn yield through a massive DeFi upgrade

The Flare blockchain has introduced lending and borrowing for $XRP-linked assets through an integration with Morpho, a crypto lending protocol that runs across multiple Ethereum compatible chains.

The update lets users lend and borrow with FXRP, a version of $XRP designed for use on Flare, the team behind the blockchain said on Monday. Flare pitched 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 been trying to change that by building tools that let $XRP be used in onchain apps 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 features on the network, including staking and yield products, for users who want more active strategies.

Morpho works differently from older lending apps that mix many assets into one shared pool. Each lending market is set up with one collateral asset and one borrowed asset, and the rules for that market are set when it is created. This structure is meant to keep problems in one market from spilling into others.

The first access point is Mystic, a separate app that shows the available vaults and lets users deposit funds or borrow against collateral. Flare said more ways to access the markets may be added later, including through Morpho’s main app.

Some vaults are being offered by independent curators, including Clearstar. These vaults include options backed by FXRP, Flare’s own token FLR and USDT0.

The rollout is part of a broader push by several networks to bring lending and borrowing to large token communities that have mostly stayed outside of onchain finance.

Read More: $XRP Ledger Upgrade Lays Groundwork for Lending, Tokenization Expansion