The renowned crypto research institution Messari recently released an in-depth report on the public chain Flare (FLR), revealing how Flare, as a "blockchain born for data," releases the massive potential of non-smart contract assets like XRP in the DeFi field through its unique built-in data infrastructure and FAssets system.
The report indicates that with the injection of liquidity and the maturation of key infrastructure, Flare is at a critical moment of leading the XRPFi narrative.
Key Insights
- Flare's built-in data stack (FTSO + FDC) makes it a "blockchain born for data," enabling verifiable cross-chain activities and oracle data without relying on external intermediary software. This native infrastructure supports FXRP's security and distinguishes Flare from other L1 public chains.
- XRPFi introduces one of the most liquid assets in cryptocurrencies into the DeFi ecosystem. Through FXRP, holders can mint 1:1 XRP tokens on Flare in a fully non-custodial manner, thereby granting EVM-level composability to the token.
- After launching USD₮0, liquidity quickly emerged. Within 13 days of launch, Flare's TVL grew by more than twice (over $120 million), providing the stablecoin depth needed for FXRP-based lending, AMM, and liquidity mining.
- Beyond FXRP, FBTC, FDOGE, and other FAssets are included in Flare's roadmap, meaning the same trust-minimized bridging architecture can mobilize liquidity from Bitcoin, Doge, and other undeveloped ecosystems.
- Songbird plays a crucial role as a production-grade canary network, with Flare using it to test FAssets v1.1 and proxy mechanisms under real economic conditions, thereby providing a solution that balances innovation speed and security, helping to reduce mainnet deployment risks.
FAssets Unleashing XRPFi Potential
The report first introduces Flare, a full-end Layer-1 designed for data-intensive use cases, with built-in powerful data infrastructure that bridges non-smart contract blockchain assets with the DeFi world.
Flare's core has three key features:
- FTSO (Flare Time Series Oracle): As a native oracle, FTSO provides decentralized data feeding for the Flare network without relying on external intermediary software.
- FDC (Flare Data Connector): Aimed at validating external data for Flare's EVM state
- FAssets: Capable of creating fully collateralized asset representations of non-smart contract assets on Flare.
A representative example of FAsset is FXRP, the XRP version usable in Flare's EVM-compatible environment. FXRP contributes to the development of XRPFi: the emergence of a DeFi ecosystem built around XRP. Flare's technology provides XRP with a path to release its potential value and integrate it into the broader DeFi field. This potential has attracted the attention of retail and institutional investors, laying the foundation for possibly the most significant advancement in the XRP ecosystem since its inception.
FAsset Institutional Interest Emerges, Driving XRPFi Narrative
The Messari report delves into FAssets, the core innovation of the Flare ecosystem that brings non-smart contract blockchain assets (such as XRP, BTC, DOGE) into Flare through a trustless decentralized system.
Using FXRP as an example, the report explains its operational mechanism. Unlike traditional wrapped tokens that rely on centralized custodial institutions, FXRP's minting process is guaranteed by a decentralized proxy network and over-collateralization mechanism.
The recent v1.1 upgrade to FAssets introduced the Core Vault, an innovation aimed at enhancing system liquidity and scalability. The Core Vault serves as a liquidity center, allowing agents to deposit XRP and, in turn, unlock collateral on the Flare blockchain. These collaterals can then be used to mint FXRP or allocated elsewhere.
For non-smart contract chains like XRPL, FAssets represents a transformative opportunity, allowing XRP token holders to participate in comprehensive DeFi activities (i.e., XRPFi), such as lending, liquidity mining, and liquidity provision. This addresses the historical limitations of XRP in DeFi applications and provides a key pathway to release its potential value without sacrificing asset custody.
Currently, FAssets is still under continuous development and deployment. FXRP has been launched on the Songbird testnet, and the response to the Songbird deployment shows strong user interest in XRPFi, quickly reaching the $2 million test quota limit in just four days. FXRP is still awaiting launch on the Flare mainnet, with the mainnet launch plan progressing smoothly as the Flare official team works to ensure a successful launch.
Institutional interest around FAssets is emerging, with the US digital currency platform Uphold, holding over 1.8 billion XRP, expressing interest in participating in the FAssets ecosystem. Additionally, Nasdaq-listed VivoPower is deploying $100 million worth of XRP on Flare. This institutional interest can be seen as key players in the XRP ecosystem viewing FAssets as a pathway to realizing XRPFi.
For retail investors, XRPFi democratizes financial services previously unavailable to XRP holders, allowing individual investors to participate in yield-generating activities similar to large institutions and earn returns through their XRP holdings.
Flare has been building infrastructure for XRPFi for years, focusing on security, scalability, and user experience, establishing a foundation that supports sustainable growth of the XRPFi ecosystem. The report is optimistic about XRPFi's future potential, stating:
"The potential impact of unlocking XRP's dormant value on DeFi should not be underestimated. With a market cap of over $125 billion, XRP represents a massive liquidity pool largely undeveloped by the DeFi sector. By bringing even a small portion of this liquidity into DeFi applications, Flare could significantly expand the entire DeFi market and drive broader blockchain adoption."
Liquidity Staking Upcoming
With the Firelight protocol built on Flare launching stXRP, liquidity staking is about to enter the XRP ecosystem. Similar to protocols like Lido providing stETH for staked ETH, Firelight will enable users to stake FXRP and receive stXRP, a liquidity staking token usable in Flare's DeFi ecosystem.
Users will be able to deposit FXRP into Firelight's Launch Vault, which will mint stXRP at a 1:1 rate. These are fully transferable ERC-20 tokens that can participate in DEXs, lending protocols, and other yield-generating applications. Meanwhile, FXRP will remain staked in Security Service Networks (SSNs) to secure protocols across multiple ecosystems and earn potential rewards. This system will allow users to benefit from staking rewards without losing liquidity, unlocking new utility for XRP in DeFi. stXRP holders may also earn Firelight points, which will influence future reward distribution. Over time, stXRP can be used as collateral, liquidity, or a yield tool across the XRPFi ecosystem.
Liquidity Injection: USD₮0 Triggers TVL Growth
The success of any DeFi ecosystem depends on deep liquidity. Messari's report specifically notes that USD₮0 (the cross-chain version of Tether USD₮ achieved through LayerZero's cross-chain homogeneous token standard) is a key catalyst for Flare's recent explosive growth.
Report data shows that within just 13 days of USD₮0's arrival, Flare's Total Value Locked (TVL) surged over 220%, growing from around $37 million to over $120 million. As of June 6, 2025, TVL has climbed to approximately $148.8 million, with USD₮0 occupying over 63% of the stablecoin share on the Flare network.
To further attract liquidity, Flare launched the USD₮0 Boost Yield Program, offering up to 30% APY (paid in Flare's reward token rFLR) for liquidity providers and early USD₮0 adopters. Combined with network gas fee returns (Flare currently pays gas fees for USD₮0-related transactions) and USD₮0's listing on Kraken, this creates a smooth stablecoin user experience.
Notably, FLR surged over 25% in the past 24 hours, with price peaking above $0.0268. Crypto analyst Stacy Muur attributes the surge to factors including SPRK token hype for SparkDEX (Flare ecosystem's first perpetual contract DEX), DeFi momentum driven by USD₮0, and breaking through key resistance levels.
Conclusion
Messari's report concludes that Flare is at the forefront of potentially transforming the XRP ecosystem by bridging the massive liquidity gap between XRP and the DeFi world, unlocking new utility and value for this third-largest cryptocurrency by market cap.
With FXRP successfully deployed on Songbird and set to launch on the mainnet, and growing institutional interest from participants like Uphold and VivoPower, the XRPFi narrative continues to develop, with Flare poised to become the central hub of XRPFi.
