Author: Haotian, Source: Author’s Twitter @tmel0211

Interestingly, @FlareNetworks proposed to provide a set of staking services for the XRP network, with the goal of allowing XRP holders to participate in other activities such as oracles, In web3 application scenarios such as L2. Many people have only seen the continuous surge of $XRP, but they do not know that $FLR has also followed suit with a 3-fold increase. We can’t help but ask, what is the relationship between Ripple and the Flare network? After BTCFi, will XRPFi become a new narrative? Next, let’s briefly sort it out:

1) Ripple XRP is a typical old currency. It was born in 2012 (much earlier than Ethereum). It aims to replace the traditional inter-bank SWIFT payment and Settlement system to realize high-speed and low-cost cross-border payment applications.

Perhaps because of this, the design of the XRP network did not adopt the network mechanism of smart contracts. Perhaps it was to focus on highly scalable payment performance, or perhaps there was no condition at the time for the XRP network to carry more Extra features.

In short, XRP does not have a series of DeFi pledge-related functions that are well-known in the web3 environment.

2) XRP and @FlareNetworks became attached around 2021. Flare announced that it would airdrop 15% of FLR, or 15 billion, to XRP holders. Why does FlareNetwork do this?

As mentioned in the background above, the XRP network does not have smart contract functions. FlareNetwork has launched the FAssets protocol, which can provide a set of cross-chain asset interoperability services for the XRP network and help XRP pass through the Flare network and other EVM environments. Achieve opening up.

This is similar to @babylonlabs_io providing a POS pledge revenue network for the Bitcoin network through a set of encryption algorithm protocols, allowing a network whose underlying assets do not have pledge mining to indirectly realize the pledge function.

3) Specifically: users can deposit XRP to a specific address, and the Data Connector, the cross-chain "node" role, monitors and verifies the user's deposit transactions on the XRP chain, and then anchors it at 1:1 Relationships mint F-XRP on FlareNetwork and require a certain amount of FLR tokens as mortgage guarantee. The mortgage rate will also be dynamically adjusted, and there will be a certain liquidation mechanism to ensure safety. Accordingly, users can redeem the original XRP at any time to unlock the corresponding collateral.

It sounds like this is similar to the concept used by many Bitcoin layer 2 solutions to provide network expansion services for the Bitcoin network, that is, using relatively native technology to allow an asset that does not have smart contract constraints to be used on another Heterogeneous networks enable circulation.

What’s curious is that FlareNetwork locked in providing services for the XRP network three years ago. It’s no wonder that thisThe skyrocketing rise of Boribo has also indirectly boosted market expectations for FLR.

4) However, Flare is not satisfied with only providing "asset cross-chain services for FAssets". According to the idea of ​​its founder @HugoPhilion, Flare should provide pledge services for XRP just like Babylon provides staking services for Bitcoin. The network provides a set of similar native services, which allows XRP to flow into other public chain systems to expand the web3 application scenarios of XRP tokens, such as oracle services, Layer2, DID, etc.

This is actually just a continuation of Flare’s original vision of providing network expansion for the XRP network, but if you think about it deeper, you will find that it is not simple.

Because Bitcoin is no longer limited to its original reserve asset attributes, a large-scale BTC ecosystem with hundreds of chains has emerged around Bitcoin. As a key card slot, Babylon provides a set of native asset "cross-chain" services for the Bitcoin ecosystem, aiming to support the entire Bitcoin layer 2 ecosystem.

If the network effect of the XRP token is further enhanced, what about a corresponding Ripple network enhancement and expansion ecosystem? Will it be the next narrative wave of XRPFi after BTCFi?

If that is the case, one can imagine how significant it would be for Flare to play the role of Babylon in the Bitcoin ecosystem.