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XRP holders just got a new DeFi trick: using their tokens as collateral for options trading, all without ever sending them to a centralized exchange. Flare Network’s FXRP, a trustless wrapped version of XRP, is now accepted as collateral on Derive, the decentralized derivatives platform formerly known as Lyra.
The setup works through Flare’s FAssets protocol, which mints FXRP as a 1:1 over-collateralized representation of XRP. The underlying XRP stays parked on the XRP Ledger while the synthetic version moves freely across EVM-compatible chains.
How the plumbing works
Flare’s FAssets system creates FXRP by locking XRP on the XRPL and minting an equivalent token on Flare’s network. The “over-collateralized” part means there’s more value backing each FXRP than the token itself is worth, providing a buffer against price swings.
Once minted, FXRP can be used across decentralized protocols just like any other ERC-20 token. On Derive, that means posting it as margin for options contracts and perpetual positions. The platform offers what it describes as institutional-grade trading features, including structured products that go beyond simple spot swaps.
Blockscout data confirms FXRP activity on-chain, verifying that the integration is live and not just a roadmap promise.
The FAssets protocol launched FXRP on mainnet in September 2025, and a v1.3 update released in May 2026 simplified the minting process. The earlier version required more manual steps and higher friction, which limited adoption. The upgrade streamlined things enough that casual users, not just DeFi power users, could reasonably participate.
Beyond options: FXRP’s expanding footprint
Derive isn’t the only venue where FXRP has gained traction. The token has been integrated into Morpho and Mystic, two lending and borrowing platforms, since early 2026. Starting in February 2026, lending markets began accepting FXRP as collateral for yield-generating strategies.
That means an XRP holder can mint FXRP, deposit it into a lending pool, earn yield, and simultaneously maintain exposure to XRP’s price movements. Layer on top of that the ability to write or buy options on Derive, and you’ve got a surprisingly complete financial toolkit built entirely around self-custody.
What this means for XRP and DeFi
The Derive integration represents a broader pattern in crypto: assets from non-EVM chains finding ways to participate in Ethereum-adjacent DeFi through wrapped or synthetic representations. Bitcoin has wBTC and cbBTC. Dogecoin has wrapped versions on several chains. Now XRP has FXRP, with the added benefit of over-collateralization baked into the design.
The hedging use case is particularly relevant given XRP’s price history. Holders who weathered volatility without any ability to hedge, besides selling, now have a way to buy protective puts or generate income by writing covered calls.
The risk side of the equation deserves attention too. Over-collateralization protects against some failure modes, but it doesn’t eliminate smart contract risk, oracle failures, or liquidity crunches during extreme market stress. Wrapped assets add a layer of complexity, and each layer introduces potential points of failure. Users posting FXRP as options collateral are stacking multiple protocol risks on top of each other.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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