- Users may mint FXRP, deposit it as collateral on Derive, and trade XRP options and perpetual contracts using their own wallets by using Flare’s FAssets system.
- XRP holders may access directional strategies, premium generation, and hedging from a single Portfolio Margin V2 account when using FXRP as collateral on Derive.
Today, Flare announced that FXRP is now supported as collateral on Derive, the biggest onchain options exchange in decentralized finance. This allows holders of XRP to access onchain XRP options and perpetuals using FXRP as collateral permissionless. By creating a native onchain derivatives market for XRP, the integration represents a significant milestone in the development of XRPFi. Up until recently, XRP owners had few alternatives for generating options premium, hedging their holdings, or using advanced trading techniques without depending on centralized exchanges or custodians.
Users may mint FXRP, deposit it as collateral on Derive, and trade XRP options and perpetual contracts using their own wallets by using Flare’s FAssets system. The integration expands the use of XRP beyond holding, lending, and borrowing by adding a derivatives and risk-management layer to the expanding XRPFi ecosystem.
XRP holders may access directional strategies, premium generation, and hedging from a single Portfolio Margin V2 account when using FXRP as collateral on Derive. When an option expires in the money, the difference is paid in USDC while the FXRP is still used as collateral. Derive’s XRP options are cash-settled in USDC.
“XRP has one of the most committed long-term holder bases in crypto, and until now they’ve had no permissionless options market to generate yield or hedge against their position. FXRP on Derive changes that while the underlying XRP remains represented through Flare’s infrastructure,” said Will Procheska, DeFi Analyst.
With the introduction, Flare’s expanding XRPFi stack—which currently provides XRP holders with access to yield tokenization, lending, and other onchain financial applications via FXRP—is expanded. With the addition of options and perpetuals, Derive enables holders to control risk and create more complex positions using collateral backed by XRP.
“Options are often the last major market to develop around an asset, and XRP has been waiting for the infrastructure,” said Nick Forster, Founder and CEO of Derive. “Flare has done the hard work of making XRP programmable and building the foundation for a real XRPFi ecosystem. FXRP gives one of crypto’s largest holder bases a credible path onchain, and adding Derive’s options markets means that capital can now be hedged, used to earn premium and traded with the same sophistication available around other major assets.”
Instead of using physical XRP delivery, Derive’s XRP options are cash-settled in USDC. As a result, users who sell options must manage their margin needs and liquidation risk appropriately and have enough USDC for settlement.
As the markets for XRP derivatives develop, the businesses view structured products as a possible next step. In the future, holders may be able to deposit FXRP into vaults that handle options contracts on their behalf thanks to automated techniques, opening up new avenues for producing volatility-driven income without having to manually manage particular strikes or positions.
Derive is a decentralized derivatives protocol allowing onchain trading of spot assets, perpetual futures, and options. Derive, which is based on Lyra Finance’s infrastructure, allows users to trade utilizing a single portfolio margin system straight from their wallets. Users may handle derivatives positions without depending on centralized intermediaries because to the protocol’s provision for self-custodial trading and permissionless access.
