Flare aims to provide a similar set of native services for the XRP network, just as Babylon provides staking services for Bitcoin.
Written by: Haotian
It's interesting that @FlareNetworks proposed to provide a staking service for the XRP network, aiming to allow XRP holders to participate in other Web3 application scenarios, such as oracles and Layer 2. Many people only see the continuous surge of $XRP, but little do they know that $FLR has also seen an impressive increase of 3 times. One can't help but ask, what is the relationship between Ripple and the Flare network? After BTCFi, will XRPFi become the new narrative? Next, let’s briefly outline:
1) Ripple's XRP is a typical old cryptocurrency, born in 2012 (much earlier than Ethereum), aimed at replacing the traditional SWIFT payment and settlement system between banks to achieve fast and low-cost cross-border payment applications.
Perhaps because of this, the design of the XRP network did not adopt a smart contract mechanism, possibly to focus on achieving high scalability in payment performance, or perhaps at that time, there were no conditions to enable the XRP network to carry more additional functions.
In short, XRP does not have the series of DeFi staking-related functions familiar in the Web3 environment.
2) XRP and @FlareNetworks became linked around 2021, when Flare announced it would airdrop 15% of FLR, which is 15 billion tokens, to XRP holders. Why does FlareNetwork want to do this?
As mentioned above, the XRP network lacks smart contract functionality, while FlareNetwork has launched the FAssets protocol, which can provide a set of cross-chain asset interoperability services for the XRP network, helping XRP connect with other EVM environments through the Flare network.
This is similar to how @babylonlabs_io provides a POS staking yield network for the Bitcoin network through a set of cryptographic protocol algorithms, enabling an underlying asset without staking mining to indirectly achieve staking functionality.
3) Specifically: Users can deposit XRP into a specific address, and the Data Connector acts as a cross-chain 'node' to monitor and verify users' deposit transactions on the XRP chain, subsequently minting F-XRP on FlareNetwork with a 1:1 peg relationship, requiring a certain amount of FLR tokens as collateral, with the collateral ratio dynamically adjusted and a certain liquidation mechanism in place to ensure security. Accordingly, users can redeem the original XRP at any time to unlock the corresponding collateral.
Listening to this, it is similar to the philosophy adopted by many Bitcoin layer 2 solutions that provide network expansion services for the Bitcoin network, which uses a relatively native technical approach to enable an asset without smart contract constraints to circulate in another heterogeneous network.
However, what’s curious is that three years ago, FlareNetwork locked in its service for the XRP network, and it's no wonder that this wave of XRP's surge has indirectly boosted market expectations for FLR.
4) However, Flare is not satisfied with merely providing 'FAssets cross-chain services.' According to its founder @HugoPhilion, Flare aims to provide a similar set of native services for the XRP network, just as Babylon provides staking services for Bitcoin. This approach could allow XRP to flow into other public chain systems to expand the Web3 application scenarios for XRP tokens, such as oracle services, Layer 2, DID, etc.
Doing so is actually just continuing the original vision of Flare to provide network expansion for the XRP network, but upon deeper reflection, it's not so simple.
Because Bitcoin is no longer limited to its original attribute as a reserve asset, a vast ecosystem of BTC expansion has emerged around it. Babylon serves as a key position, providing a set of native asset 'cross-chain' services for the Bitcoin ecosystem, intending to support the entire Bitcoin layer 2 ecosystem.
If the network effect of the XRP token further enhances, could there be a corresponding enhanced expansion ecosystem for the Ripple network? Will it be the next XRPFi narrative trend after BTCFi?
If that’s the case, one can only imagine how significant it would be for Flare to play the role of Babylon in the Bitcoin ecosystem.
