EVM-based protocol Flare is working with Firelight to provide XRP holders with up to 7% yield on their idle holdings.
This was revealed in a recent interview with Scott Melker, the Wolf of All Streets. Notably, Melker spoke with Hugo Philion, co-founder and CEO of Flare Labs, and Jesus Rodriguez, co-founder and CTO of Sentora, who is leading Firelight.
Specifically, both projects are working together to introduce decentralized finance products that can finally give XRP holders access to lending, borrowing, and yield opportunities.
Flare and Firelight Tout Up to 7% Yield on XRP
During the discussion, Melker noted that XRP emerged originally as a token for cross-border payments. However, he stressed that this has changed, with more teams now building tools on and around XRP. He asked Philion why Flare chose to focus on XRP and what makes its network suitable for this type of product.
In response, Philion explained that Flare wants to give XRP holders the same kind of flexibility Ethereum users get through MakerDAO. When they lock XRP as collateral, investors could mint stablecoins, purchase other assets, or deploy funds into decentralized exchanges and lending pools to generate yield.
The Flare Labs CEO said this approach allows people to turn a static asset into one that creates returns while also presenting exposure to different risks.
He also emphasized that Flare designed its system to avoid custodial risks. Through FXRP, the wrapped version of XRP on Flare, users can move tokens without relying on third parties.
Moreover, validators secure the network collectively, which Philion argued makes the bridge highly decentralized. Although he admitted that many retail investors may still access yield through custodial exchanges, he stressed that Flare itself remains non-custodial.
Speaking further, Melker later asked about potential yields. Replying, Rodriguez revealed that tests show XRP could deliver annual returns in the 4% to 7% range.
He believes the numbers are impressive, especially for an asset that has never offered yield and has long carried a zero cost of capital. Rodriguez also highlighted the idea of using restaking to create more advanced DeFi products, leading to deeper financial uses for XRP.
XRP Community Reacts
Interestingly, the interview drew comments from the XRP community. Brad Kimes from Digital Perspectives claimed that with this product, XRP holders may soon see the biggest release of idle liquidity in crypto.
The biggest unlock of idle liquidity in crypto is coming to a platform near you. Imagine earning 4-7% on your XRP and creating a taxable sale while earning a return that is similar to the Bond market or better.
Lock in. 😎👇 https://t.co/Y2iE6VzAGX
— Digital Perspectives (@DigPerspectives) August 17, 2025
He compared it to unlocking a bond-like income stream from an asset that has historically sat without generating yield. Kimes described the development as a major milestone that could change how people use XRP.
In addition, attorney Bill Morgan also praised the proposal, noting that returns of 4% to 7% would be a welcome addition for long-term holders who currently gain nothing from their tokens.
However, Vet, a validator on the XRP Ledger’s dUNL, argued that the risk didn’t match the reward. He said that putting a volatile asset like XRP into yield strategies for only 7% doesn’t justify the exposure to third parties. He claimed that DeFi needs to move beyond short-term yield plays and gambling-style speculation.
It's not worth it for volatile assets.
I can hold it and gain 7% without exposing myself to third party risk. If so, i want a lot more than 7%.
We have to build DeFi around more than gambling and yield for assets that barely anyone is asking for.
— Vet 🏴☠️ (@Vet_X0) August 17, 2025
Morgan responded with a suggestion that an ideal product would let people lock in their XRP long-term while safely borrowing against it when they need cash. This way, holders could preserve their positions while still accessing liquidity. Nonetheless, he acknowledged that such a product has yet to emerge.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
