Flare launches yield-bearing XRP product to expand DeFi use

Flare Network launched a new yield-bearing XRP product called earnXRP in an effort to bring more tokens into decentralized finance and increase its onchain utility.

earnXRP, which officially went live on Monday, was developed through a collaboration between Upshift Finance, Clearstar, and Flare Network, a Layer 1 blockchain supporting XRP-focused decentralized applications (dapps). 

The yield-earning project allows users to deposit FXRP, a wrapped version of XRP issued on Flare, into a single vault that automatically deploys funds on several onchain strategies. The FXRP then generates yield denominated in Ripple’s token, according to the teams behind the product.

Upshift provides the yield vault infrastructure for earnXRP, Clearstar is the onchain risk manager overseeing how capital is allocated, and Flare supplies the underlying blockchain infrastructure.

Ethan Luc, growth lead at Upshift, said only a small fraction of XRP has been used in decentralized finance. He cited data showing that only 0.1% of the token’s circulating supply is currently active in defi protocols, even though XRP is the fifth-largest crypto by market capitalization.

Crypto platforms launch yield product to boost ‘XRPFi’ 

The earnXRP launch comes on the heels of two other XRP-specific financial products that are similar to the yield farming tokens in Ethereum and other smart contract platforms.  

In September, Cryptopolitan reported that tokenization platform Midas unveiled mXRP in partnership with Interop Labs, the developer behind the Axelar interoperability protocol, and risk curator Hyperithm. Midas’ website shows mXRP has accumulated roughly $20 million in total value locked since its inception.

Earlier in December, Firelight Finance launched an XRP staking protocol on Flare that issues a liquid token known as stXRP, in which holders can earn rewards through a DeFi insurance-based model.

Luc reiterated that stXRP is a receipt token representing deposits made directly into Firelight, but earnXRP functions as a vault token that allocates capital in trading protocols, including Firelight.

Users who deposit FXRP receive earnXRP tokens representing their share of the vault, which can be redeemed at any time for FXRP. earnXRP allocates funds to carry trades, staking, and cover underwriting through Firelight at launch, alongside providing concentrated liquidity on automated market makers. 

The initial deposit cap has been set at 5 million FXRP, with no individual user limits, and all protocol fees are waived for the first 30 days following launch.

EarnXRP is targeting returns between 4% and 10%, depending on the size of the vault and overall capital inflows. Jashiel Alamo, head of research at Clearstar Labs, said mid-sized vaults could support higher yields due to strategy flexibility and liquidity conditions.

For vaults holding between $1 million and $10 million in assets, target returns in the 7% to 10% range are considered achievable. He added that vaults reaching $50 million to $100 million in size would likely see returns fall to around 3% to 4%.

Crypto industry pushes back on stablecoin yield limits 

The launch of earnXRP comes as the crypto industry is in a policy fight in Washington over the treatment of yield-bearing digital assets.

Several crypto companies and advocacy groups are asking lawmakers on the Senate Banking Committee to reject any calls for imposing new restrictions on stablecoin rewards in upcoming legislation.

In a letter led by the Blockchain Association sent last Thursday, more than 125 crypto organizations opposed reinterpreting and expanding an existing ban on stablecoin interest contained in the GENIUS Act.

Signatories included the Bitcoin Policy Institute, Crypto Council for Innovation, DeFi Education Fund, Solana Policy Institute, the Digital Chamber, a16z Crypto, Coinbase, Gemini, Kraken, and Ripple.

The GENIUS Act, signed into law by President Trump in July, includes a provision prohibiting stablecoin issuers from giving “any form of interest or yield” directly to holders.

That language is now a point of contention between the crypto and banking sectors, with disagreements over how the interest ban should be applied and if lawmakers should amend the statute before regulators finalize the rules.

“The idea that we reopen [the issue] before we even start rulemaking just doesn’t make any sense,” Blockchain Association CEO Summer Mersinger told US publication The Hill. “When Congress passes a bill, and it gets signed into law, if you can reopen it right away, you’ve got a question about how much certainty is that really bringing to the market.”

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