Flare Team Shares How XRP Holders Can Become Collateral Providers on FAssets

The Flare Network team shares a guide on how XRP holders can become collateral providers within the FAssets project.

The FAssets system, currently in its beta phase, is designed to bring Decentralized Finance (DeFi) and smart contract capabilities to assets that traditionally lack these functions, such as XRP, BTC, DOGE, and LTC.

This opens up new possibilities for holders of these cryptocurrencies, allowing them to participate in various DeFi protocols by minting their tokens on the Flare network.

In a video guide, the Flare team explained how users, particularly XRP holders, can become collateral providers on the FAssets platform.

Bridging $XRP to @FlareNetworks is imminent.

Try it now on https://t.co/AM4i9ntv9w

Spend 3 minutes to learn how to:

• Become a collateral provider
• Add $FLR to the agent pool
• Claim your rewards ☀️

Got ideas for our next #FAssets tutorial? pic.twitter.com/gk6SOegYOs

— Flare ☀️ (@FlareNetworks) September 5, 2024

Participants can begin the process by navigating to the FAssets website, where they can view various pools, including the total value locked (TVL), transaction history, and their current position within the ecosystem. 

According to the guide, to become collateral providers, users could simply select a pool of their choice, enter the amount of Flare (FLR) tokens to deposit, and confirm the transaction via their wallet.

Each collateral pool is managed by an agent, and users can choose any number of active pools to contribute to. By adding their FLR tokens to a pool, participants help enhance the reliability of the minting process. In return, they earn rewards every time the agent’s pool is used to mint FAssets. 

Withdrawing from a pool is just as straightforward. Users can click on the “Withdraw” button, choose the amount they want to remove from the pool, and confirm the action in their wallet.

Earning Rewards as a Collateral Provider

The guide confirmed that the rewards for being a collateral provider are determined by several factors, including the pool’s size and the minting fees charged by the agent. 

The minting fee is a commission paid by users when they mint FAssets, and a percentage of that fee is distributed among the collateral providers. Per the video, the distribution of rewards depends on the proportion of the user’s funds within the pool.

For example, if a collateral provider’s funds make up 20% of a pool, and the pool’s minting fee is 10%, the user would receive a share of the fee based on their contribution. Notably, if a user mints 100 FXRP and the pool’s share is 50%, the collateral provider would earn a percentage of the 50% pool share.

The rewards can be claimed through the FAssets platform. Participants have the option to claim all available rewards at once, or they can withdraw rewards from specific agents. The rewards are displayed at the top of the page, allowing users to track their claimable and lifetime earnings.

FAssets Gains Traction

The FAssets project is a crucial part of the Flare Network’s mission to enhance the utility of non-smart contract tokens. Amid increased adoption, the Flare Network saw the minting of over 937,000 XRP on the first day of testing.

In using FAssets, participants can mint tokens like FXRP (Flare-based XRP) on the Flare Network. These minted tokens can then be used within the Flare ecosystem for a range of decentralized financial applications, including lending, staking, and yield farming. 

This creates new opportunities for participants to earn rewards and engage in smart contract functionalities without relying on their original blockchain’s limitations. Flare founder Hugo Philion confirmed that the upcoming XRPL smart contracts functionality would not hinder FXRP.