Flare announces that FXRP, a chain-mapping asset representing XRP, has been plugged into the central derivative platform, Derive. The user can convert XRP to FXRP via the Fassets Bridge in Flare and deposit it in the Derive account, where the derivatives are traded directly from the hosting wallet.
Negotiable XRP options and endurance
After this access, XRP holders are able to use derivatives on the chain without relying on a centralized exchange. Negotiable products include XRP options, which are used to lock price ranges, and durability contracts, which are used to participate in price fluctuations.
According to the founder and CEO Nick Foster, options are usually an important component of a particular asset market as it matures. With FXRP access, XRP holders can conduct more complete hedge and warehouse management on the chain.
The options are settled on USDC.
The XRP option on Derive is not settled in XRP, but in a stable currency USDC to pay the difference. That is, even if the user uses FXRP as collateral, USDC is used for the settlement of the proceeds after the end of the term.
This also entails additional security requirements. The party that sells the options needs to hold sufficient USDC and maintain the level of the security required by the platform, otherwise the position may face a forced levelling.
- The encumbered asset is FXRP
- Settlement of assets as USDC
- Support for options and durability contracts
FXRP Expand DeFi
This access also expanded the use of FXRP. Flare states that earlier this month, FXRP was granted access as collateral to the RLUSD Main vault on Morpho of DeFi Risk Management.
The service allows XRP holders to cross the FXRP to the Ether Workshop and borrow the Ripple Stable RLUSD without selling XRP. With Derive access, FXRP has covered two main scenarios: borrowing and chain derivatives.