What Happened
Flare Network launched lending and borrowing for FXRP through the Morpho lending protocol on February 3, 2026. XRP holders can now deposit FXRP to earn interest or use it as collateral to borrow other assets like stablecoins.
Alongside the Morpho integration, three entities, Upshift, Clearstar, and Flare, jointly launched earnXRP, the first fully on-chain yield product denominated in XRP. The vault targets yields ranging from 4% to 10%, with smaller vaults ($1M to $10M) targeting the higher 7% to 10% range.
FXRP itself is a 1:1, overcollateralized ERC-20 representation of XRP on Flare. It is non-custodial and verified on-chain via Flare's enshrined data protocols, the Flare Time Series Oracle and the Flare Data Connector. This distinguishes it from earlier wrapped XRP tokens that relied on single custodians.
Why People Care
XRP is the fifth-largest cryptocurrency by market cap, yet only 0.1% of its supply is currently utilized in DeFi. That is a staggering gap compared to Ethereum, where more than 30% of supply is locked in various protocols.
The reason is simple: the XRP Ledger does not support smart contracts. Unlike Ethereum or Solana, XRP holders have historically had no native way to lend, borrow, or farm yield with their tokens. They could hold, transfer, or sell. That was it.
Flare's FXRP changes this dynamic. By bridging XRP into an EVM-compatible environment through overcollateralized minting, the token can now interact with the same DeFi primitives that ETH and SOL holders have used for years. The Morpho integration is the latest and most significant step, bringing isolated lending markets to FXRP for the first time.
What Actually Broke
The technical unlock here is Morpho's isolated market design. Unlike older lending protocols where all assets share a single risk pool, Morpho creates individual markets. Each market has one collateral asset and one borrowed asset, with rules set at creation time.
This matters because problems in one market cannot spill into others. If an FXRP/USDT market experiences a liquidation cascade, it does not affect an FXRP/USDC market or any other pair. This isolation model is particularly important for a new asset class like FXRP that does not have years of battle-tested DeFi history.
Users access the lending markets through the Mystic app, with initial vaults backed by FXRP, FLR (Flare's native token), and USDT0.
The earnXRP vault operates differently from direct lending. It uses a carry trade strategy: the vault borrows stablecoins using FXRP as collateral at low rates, then deploys those stablecoins into DeFi protocols where yields exceed borrowing costs. Profits are compounded back into FXRP, keeping the entire position XRP-denominated.
Launch parameters for earnXRP include an initial deposit cap of 5 million FXRP with no per-user limit, fees waived for the first 30 days, 5x Upshift Points for early depositors, and a standard 72-hour withdrawal period with instant redemption available for a fee.
What This Means for Your Money
The yield potential is real but comes with important caveats. earnXRP targets 4% to 10% yield denominated in XRP. At the higher end of that range, a 10,000 XRP deposit could generate 700 to 1,000 XRP annually. That is meaningful passive income for long-term holders.
However, the carry trade strategy depends on DeFi rate spreads remaining favorable. If borrowing costs rise or deployment yields compress, the vault's returns will shrink. This is not a fixed-rate product.
The 5 million FXRP deposit cap also means early capacity is limited. At current XRP prices, that cap represents roughly $12 to $15 million in deposits. Once the cap fills, new depositors will need to wait for it to be raised.
For XRP holders who have been sitting on their tokens waiting for DeFi opportunities, this is the most concrete option yet. The non-custodial design means you are not trusting a centralized entity with your assets. The overcollateralization means FXRP maintains its peg through on-chain mechanisms rather than promises.
What This Means for Crypto Users
The institutional signal here is significant. VivoPower, a Nasdaq-listed clean energy company, has announced plans to deploy up to $100M in XRP within the FXRP ecosystem. Uphold, which manages more than 1.8 billion XRP for users, plans to connect its holdings to Flare's FAssets system.
More than 90 million FXRP have already been minted, indicating real adoption beyond announcement hype.
For crypto card users, this development adds a new dimension to XRP holdings. Rather than keeping XRP idle in a wallet connected to a spending card, holders can now put a portion to work earning yield through FXRP while maintaining exposure to XRP price appreciation. The 72-hour withdrawal window means this is better suited for longer-term allocations rather than funds you need for daily spending.
Flare also plans to introduce wrapped versions of Bitcoin and Dogecoin through its FAssets system, which could expand non-smart-contract tokens into DeFi even further.
FAQ
What is FXRP? FXRP is a 1:1 overcollateralized ERC-20 token on Flare Network that represents XRP. It is non-custodial and verified on-chain, allowing XRP to be used in DeFi applications.
How do I get FXRP? You mint FXRP through Flare's FAssets system by locking XRP on the XRP Ledger. The process creates an equivalent amount of FXRP on Flare that can be redeemed back to XRP.
What yield can I earn with earnXRP? earnXRP targets 4% to 10% annual yield denominated in XRP, with smaller vaults ($1M to $10M) at the higher end. Yields are variable and depend on DeFi rate spreads.
Is my XRP safe? FXRP is overcollateralized and non-custodial, verified by Flare's on-chain data protocols. However, smart contract risk exists with any DeFi protocol. Start with amounts you are comfortable placing in DeFi.
Can I withdraw anytime? The standard withdrawal period is 72 hours. Instant redemption is available for a fee.
Overview
Flare Network's launch of FXRP lending via Morpho and the earnXRP yield vault marks a turning point for XRP in DeFi. For the first time, XRP holders have a non-custodial, on-chain pathway to earn yield, borrow against their holdings, and participate in the DeFi ecosystem without selling their tokens. With only 0.1% of XRP supply currently in DeFi, the addressable market is enormous. The early institutional commitments from VivoPower and Uphold suggest this is more than a niche experiment. Whether the yields sustain depends on DeFi rate dynamics, but the infrastructure is now live and functional.
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