Flare to Welcome First Ever Native Stablecoin USDX

Flare Networks announces the upcoming launch of its first ever native stablecoin a month after Ripple disclosed plans to introduce a stablecoin to the XRP Ledger (XRPL).

The team behind Flare announced the upcoming project in a press release today, highlighting the stablecoin as a product designed to strengthen the Flare DeFi ecosystem, which is still in its early stages of development.

Hex Trust, a leading figure in digital asset custody, will oversee the launch of the stablecoin. The company will utilize its tokenization division, HT Digital Assets, to develop USDX, positioning it as a model of stability within the Flare ecosystem.

Details of the USDX Stablecoin

The stablecoin will maintain a 1:1 ratio with the U.S. dollar, further supported by liquid assets such as short-term Treasury Bills, with security from prominent financial institutions. This framework looks to inspire considerable confidence among prospective USDX users.

While multiple stablecoins have sprung up in the crypto industry, some of them have been plagued by cases of depegs. For instance, the Terra ecosystem collapse of May 2022 occurred due to the depeg of TerraUSD (UST), the ecosystem’s native stablecoin. These depegs have underscored the importance of maintaining stability.

Per the latest press release, Hex Trust will collaborate with Clearpool, a blockchain-based credit marketplace, to launch the forthcoming Flare stablecoin. Clearpool’s contribution involves establishing a liquidity pool specifically for staking USDX on the Flare Network.

This will enable USDX holders to stake their stablecoins and earn real-world yields, without any lock-up periods. Users staking USDX on Clearpool will receive a wrapped version known as cUSDX. These yields include base returns as well as additional incentives in the form of FLR tokens.

Another notable feature of the upcoming stablecoin is its incorporation into Flare’s FAsset system. The upcoming FAsset system looks to enable smart contracts capabilities for assets that do not natively support them, including XRP, Bitcoin and DOGE. Flare will allow users to leverage cUSDX as collateral on the FAsset project.

Flare Takes Part in the Stablecoin Scene

Despite the growing saturation, the stablecoin market has room for further growth, boasting a valuation of $150 billion at last check. With the market projected to reach $2.8 trillion in the next four years, Hex Trust is the latest to express interest. 

Notably, Ripple announced last month that it would also be launching a stablecoin on the XRPL and Ethereum networks later this year. Interestingly, several industry commentators had speculated that Ripple’s upcoming stablecoin could also bear the name USDX.