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XRP DeFi becomes available to institutions as Hex Trust introduces custodial access for FXRP.
Custodian Hex Trust will enable clients to mint and redeem FXRP and stake FLR via its platform, providing institutions a mechanism to utilize XRP effectively.
(Unsplash/modified by CoinDesk)
What to know:
- Hex Trust has enhanced its collaboration with Flare to provide institutional clients custodial access to Flare’s XRP-centric DeFi ecosystem, which includes the minting of FXRP tokens along with redemption and native staking of FLR.
- This integration allows institutions to maintain assets under Hex’s custody while engaging with Flare through regulated approvals and multi-approval policy workflows, addressing operational and compliance issues linked to hot wallets.
- Flare’s FXRP and FAssets framework, now supported by Hex, is designed to convert XRP into usable collateral for on-chain lending and trading, with intentions to incorporate additional assets like bitcoin in the future.
Hex Trust, a custodian of digital assets, announced an expansion of its partnership with the Flare blockchain to provide institutional clients a pathway into XRP -focused decentralized finance (DeFi) while enabling them to retain control over their assets.
This partnership positions Hex as a gateway for funds and companies seeking exposure to Flare-based strategies but have refrained from participation due to operational and compliance challenges. It allows clients to mint and redeem FXRP, a wrapped version of XRP for the Flare network, in addition to staking the native FLR token.
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Staking and token wrapping generally necessitate direct wallet connections and transaction signing from hot wallets, a configuration many institutions are reluctant to implement for core treasury assets. Hex asserts it addresses this gap by keeping assets secure while allowing clients to engage with Flare through regulated approvals and standardized workflows.
FXRP serves as Flare’s one-to-one representation of XRP, crafted to enable XRP holders to utilize the token in smart-contract applications without moving the underlying asset directly onto a smart-contract chain.
Historically, XRP has had limited DeFi options compared to tokens created on smart-contract platforms. Flare aims to alter this situation by developing tools that facilitate XRP’s use in on-chain applications while keeping the original XRP on the XRP Ledger.
This week, Flare launched lending markets for FXRP, enabling users to earn yield or borrow against wrapped XRP without the need to sell. This initiative is directed at transforming XRP, which lacks native smart-contract functionality, into usable collateral for on-chain credit and trading.
The operational details are significant since institutional demand often relies more on processes than on yield. Hex indicated that minting and redemption processes will utilize its policy engine, which allows for multi-approval controls for treasury transactions instead of relying on a single trader’s actions through a wallet prompt.
Flare has indicated that its FAssets system, which underlies FXRP, was structured with audits and oversight to mitigate risks associated with previous wrapping models. Hex also mentioned plans to support additional assets on Flare over time, including bitcoin , as the network broadens its tokenization and collateral capabilities.
