Enosys has launched 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 is launching initially with FXRP and wFLR as collateral, and will soon expand to include stXRP.
Users can deposit FXRP or wFLR as collateral to open a CDP and mint the new decentralized stablecoin. The launch configuration details are as follows:
- •FXRP branch mint cap: $4 million CDP
- •wFLR branch mint cap: $1 million CDP
- •Minimum debt per Trove: $500 CDP
Early users who deposit the stablecoin into the Stability Pool or provide liquidity on supported Decentralized Exchanges (DEXs) are eligible for rFLR incentives. Support for staked XRP (stXRP) as collateral is coming shortly, which will more deeply integrate stXRP as a composable asset across Flare DeFi.
How CDPs Power Stablecoins
The engine behind this system is a Collateralized Debt Position (CDP). A CDP protocol allows users to mint a stablecoin against their collateral. The collateral backs the stablecoin and helps it maintain a value close to $1. This means that XRP holders will be able to access the value of their XRP without having to sell their tokens.
A crucial component of this mechanism is the stability pool, which ensures the system can cover outstanding debt in case of liquidation. Users who stake their stablecoin in the stability pool are rewarded with real yield coming from the mint fees, interest paid, and liquidation rewards.
On top of this, a cornerstone of Enosys Loans is its integration with the Flare Time Series Oracle (FTSO) for decentralized collateral pricing. Unlike traditional oracles that may rely on centralized data sources, the FTSO aggregates price feeds from independent signal providers, delivering highly accurate and tamper-resistant data for collateral assets.
A Fork of Liquity V2 on Flare
Enosys Loans is a friendly fork of Liquity V2, a well-established CDP protocol in Decentralized Finance (DeFi). Since its launch in 2021, Liquity has secured billions in collateral, maintained its stablecoin peg through extreme market volatility, and proven the resilience of its redemption and stability pool design.
Liquity V2 keeps the core principles that made V1 trusted — immutability, decentralization, and security — while adding upgrades such as user-set borrowing rates, improved capital efficiency, and protocol-incentivized liquidity.
On Flare, users will be able to lock FXRP, a 1-to-1 representation of XRP, into the protocol to mint a stablecoin. For the first time, XRP holders gain access to a decentralized stablecoin backed by their assets, enabling borrowing without selling, liquidity provision, and yield opportunities across DeFi.
Uniquely, borrowers on Flare can set the annual percentage rate (APR) they’re willing to pay. However, lower rates come with a tradeoff: the lowest interest rate positions are the first to be redeemed against if the stablecoin falls below its $1 peg.
Shortly after launch, support will expand to include stXRP, the liquid staking token from Firelight. That means XRP holders can put their staked XRP to work twice: earning staking rewards and using stXRP as collateral to mint stablecoins.
Key Benefits
- •First XRP-backed stablecoin: Flare becomes home to a decentralized stablecoin collateralized by one of the largest crypto assets.
- •Deeper integration of stXRP: Liquid staking token becomes composable, evolving into foundational collateral for DeFi.
- •More activity for FAssets: Every minted stablecoin drives usage of the FAssets system, strengthening the network and boosting liquidity flows.
To bootstrap adoption, the protocol will integrate rFLR incentives. Users who utilize the minted stablecoin in the stability pool or decentralized exchange liquidity pools will be able to earn rFLR rewards.
The Road Ahead
Support for additional Flare-native collaterals such as FLR and more FAssets are planned, alongside expanded integrations with other DeFi apps in the ecosystem. By bringing a proven model like Liquity V2 to Flare, Enosys is laying the foundation for stable, decentralized liquidity powered by XRP and enhanced by liquid staking.