The post First-Ever XRP-Backed Stablecoin Loans Go Live on Flare via Enosys appeared on BitcoinEthereumNews.com.
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**The Web3 software development entity Enosys has introduced a first-of-its-kind stablecoin loan on the interoperability layer-1 network, Flare.** These innovative loans are backed by Ripple’s native cryptocurrency, XRP, marking a significant milestone in the DeFi ecosystem.
According to a press release shared with CryptoPotato, the loans will be powered by a Collateralized Debt Position (CDP) protocol. This mechanism allows XRP holders to mint overcollateralized stablecoins directly on the Flare network, providing new ways to leverage their assets without selling them.
### First XRP-backed Stablecoin Loans on Flare
Enosys explained that XRP holdings will underpin the stablecoins, ensuring they maintain a value close to $1. This approach enables XRP holders to access the value of their crypto assets while retaining ownership. The CDP protocol designated for deployment on Flare is called **Liquity**.
Liquity is recognized as one of the most reliable protocols in the decentralized finance (DeFi) sector. Since its initial launch in 2021, the network has secured billions of dollars in collateral and has consistently maintained its stablecoin peg—even amid volatile market conditions.
A key factor behind Liquity’s success is its **stability pool**. This pool allows users to stake their stablecoins to earn yields generated from mint fees, liquidation rewards, and interest paid on loans. The stability pool serves as a safeguard, ensuring the protocol can cover outstanding debts during liquidations.
### Enhancements with Liquity V2 on Flare
Enosys will release a forked version of Liquity V2 on Flare, preserving all the features that earned the original protocol its reputation for security and stability. The updates will introduce improvements such as protocol-incentivized liquidity, enhanced capital efficiency, and user-set borrowing rates—offering users more flexibility and better returns.
### Expanding Access to DeFi Yield Opportunities
Initially, the Enosys and Flare partnership will support a select group of Flare-native tokens, including Flare XRP (FXRP) and Wrapped Flare (wFLR). Plans are already underway to extend these capabilities to staked XRP (stXRP), enabling Ripple holders to further maximize the utility of their assets.
Using this service, users can lock their FXRP on Flare and mint a stablecoin, which can then be deployed to provide liquidity and access DeFi yield-generating opportunities—all without selling their underlying XRP holdings.
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This development paves the way for XRP holders to actively participate in the DeFi landscape on Flare, unlocking liquidity and yield potential while maintaining exposure to their assets.
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