Ripple milestone: First XRP-backed stablecoin hits the market

The world’s first stablecoin backed by XRP has gone live on Flare network, promising many potential benefits for holders.

Flare network’s announcement of the launch on 19 September indicates that the stablecoin is coming alongside Enosys Loans, the first-ever Collateralized Debt Position (CDP) protocol that allows XRP holders to mint a trustless, overcollateralized stablecoin directly on Flare.

The protocol will support three liquid staking tokens, starting with FXRP and wFLR, and sand eventually stXRP.

How it works 

Stablecoins are a “stable” version of crypto assets that are less volatile and have their value near $1. A CDP is a protocol that allows users to mint a stablecoin against their collateral which then backs the stablecoin, giving it that stable value.. 

With such a system, XRP holders will be able to access the value of their XRP without having to sell their tokens.

The system also uses a stability pool — which ensures the system can cover outstanding debt in case of liquidation — that rewards users who stake their stablecoin to support it. Rewards come from sources such as mint fees, interest paid, and liquidation rewards.

Enosys Loans integrates with the Flare Time Series Oracle (FTSO), a decentralized collateral pricing system that aggregates price feeds from independent signals. 

The power of FTSO lies in the fact that it does not rely on any centralized data resource, making it more highly accurate in providing tamper-resistant data for collateral assets.

The liquidity tokens, FXRP, wFLR, and stXRP.will allow holders to earn staking rewards and at the same time use them as collateral to mint stablecoins.

Major win for XRP

XRP has been increasing in popularity recently, since it first won its long-standing war against the SEC. 

The token has also become of much interest to investors considering its recent growth and the metrics which point to more hunger.

With the launch of a stablecoin that uses it as collateral, the token has received another potential boost, both to its utility and eventually its value for holders.