Original author: Haotian (X: @tme l0 211)

Interesting, @FlareNetworks proposes a trapstake service for the XRP network, aiming to allow XRP holders to participate in other web3 applications such as Oracle Machine and L2. Many only see the continuous big pump of $XRP, without realizing that $FLR has also surged by 3 times. One can't help but ask, what is the relationship between Ripple and Flare Network? Following BTCFi, will XRPFi also become a new narrative? Next, let's briefly summarize:

1）Ripple XRP is a typical old currency, which was born in 2012 (much earlier than ETH), aiming to replace the traditional interbank SWIFT payment and Settlement system, and achieve high-speed and low-cost cross-border payment applications.

Perhaps for this reason, the design of the XRP network does not adopt the network mechanism of smart contracts. It may be to focus on high scalability and payment performance, or perhaps there were no conditions at that time for the XRP network to support more additional features.

In short, XRP does not have a series of Decentralized Finance stake-related functions known to everyone in the web3 environment.

2. XRP and @FlareNetworks met around 2021, and Flare announced to Airdrop 15% proportion of FLR, which is 15 billion coins, for XRP holders. Why does FlareNetwork do this?

The background mentioned above, XRP network does not have smart contracts functionality, FlareNetwork has introduced the FAssets protocol, which can provide a trap cross-chain interaction asset interoperability service for the XRP network, helping XRP to connect through the Flare network and other EVM environments.

This is similar to @babylonlabs_io providing a trap Encryption Algorithm protocol for the BTC network, which indirectly enables the function of stake for a base asset that does not have stake Mining in the network.

3. Specifically: users can deposit XRP into a specific Address. The Data Connector, acting as the Cross-Chain Interaction 'Node', monitors and verifies the user's deposit transaction on the XRP on-chain. It then mints F-XRP on the FlareNetwork in a 1:1 anchored relationship, requiring a certain amount of FLR Token as collateral. The collateral ratio will also be dynamically adjusted, and there is a certain liquidation mechanism in place to ensure security. Correspondingly, users can redeem the original XRP to unlock the corresponding Collateral at any time.

Listening to it, this is similar to many BTC layer 2 solutions that provide network extension services for the BTC network, that is, using a relatively native technical method to enable an asset without smart contract constraints to circulate in another heterogeneous network.

However, it is curious that three years ago FlareNetwork locked in to provide services for the XRP network. It is also not surprising that this big pump of Ripple indirectly boosted market expectations for FLR.

4. However, Flare is not content with just providing "Cross-Chain Interaction services for FAssets". According to its founder @HugoPhilion's vision, Flare aims to provide a native service similar to Babylon's stake service for BTC, allowing XRP to flow into other public chain systems to expand the web3 application scenarios of XRP Token, such as: Oracle Machine services, Layer 2, DID, and so on.

Doing this is actually just continuing Flare's original vision of providing network expansion for the XRP network, but thinking deeper reveals that it is not simple.

Because, BTC is no longer limited to its original reserve asset property, and a hundred chains have emerged around BTC, forming a large-scale extended BTC ecosystem. Babylon, as a key position, provides a trap native asset 'Cross-Chain Interaction' service for the BTC ecosystem, intending to support the entire BTC layer 2 ecosystem.

If the network effect of XRP Token is further enhanced, will there be a corresponding expansion of the Ripple network ecosystem? Will XRPFi be the next narrative wave after BTCFi?

If that's the case, the significance of Flare playing the role of Babylon in the BTC ecosystem can be imagined.

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