The Flare Network has released a guide for XRP holders interested in becoming collateral providers within its FAssets system.
This platform currently in its beta phase, aims to introduce decentralized finance (DeFi) and smart contract functionality to digital assets like XRP, BTC, DOGE, and LTC.
The initiative allows holders of these cryptocurrencies to engage in various DeFi protocols by minting their tokens on the Flare Network.
Becoming a Collateral Provider
In a video guide, Flare outlines the steps for XRP holders to contribute as collateral providers on the FAssets platform. To begin, users should navigate to the FAssets website, where they can explore available pools, including key details such as total value locked (TVL), transaction history, and their standing within the network.
The process of becoming a collateral provider is straightforward. Users choose a pool, specify the number of Flare (FLR) tokens they wish to deposit, and confirm the transaction through their wallet. Each pool is managed by an agent and participants have the option to contribute to multiple active pools.
By depositing their FLR tokens, collateral providers play a role in supporting the reliability of the minting process, which allows them to earn rewards each time the pool they support is used for minting FAssets. For withdrawal, users can select the “Withdraw” option, input the amount they want to remove, and confirm the withdrawal in their wallet.
Reward Mechanisms for Collateral Providers
According to Flare’s guide, collateral providers can earn rewards based on their participation in the ecosystem. These rewards are influenced by several factors, such as the size of the pool and the minting fees charged by the agent managing the pool.
When users mint FAssets, the minting fee is distributed to the collateral providers in proportion to their share in the pool. For example, if a provider holds 20% of the pool’s value, they receive 20% of the fees.
Similarly, if a user mints 100 FXRP and the pool’s share is 50%, the provider earns a portion of that 50%. These rewards can be tracked and claimed through the FAssets platform, with the option to withdraw from specific agents or claim all rewards once.
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Growing Adoption of FAssets
FAssets is a significant development in Flare Network’s strategy to enhance the functionality of tokens that do not natively support smart contracts. The system has gained considerable traction since its introduction. For example, over 937,000 XRP were minted on the first day of testing.
The FAssets platform on the Flare Network allows participants to mint FXRP (Flare-based XRP tokens) and engage in decentralized financial activities like staking, lending, and yield farming, offering smart contract capabilities that are absent on their original blockchain networks.
Flare founder, Hugo Philion, confirmed that ongoing smart contract development for the XRP Ledger will not affect FXRP’s functionality, ensuring that XRP holders can continue benefiting from FAssets and exploring DeFi opportunities on the Flare Network without disruption.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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