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In the cryptocurrency sector, the Flare Network team has released a detailed guide on how XRP holders can participate as collateral providers within the FAssets project.
Steps to Becoming a Collateral Provider
The FAssets platform, currently in its beta phase, aims to integrate Decentralized Finance (DeFi) and smart contract capabilities with cryptocurrencies that traditionally lack these features, such as XRP, BTC, DOGE, and LTC. This expansion enables users to engage in various DeFi protocols by minting their tokens on the Flare network.
To become a collateral provider, XRP (XRP) holders can follow a step-by-step process outlined by the Flare team. Users should visit the FAssets website to access information on different pools, including total value locked (TVL), transaction history, and their current positions.
The process involves selecting a pool of interest, depositing Flare (FLR) tokens into the pool, and confirming the transaction through their wallet. Each pool is managed by an agent, and users have the option to contribute to multiple active pools. By adding FLR tokens, users support the reliability of the minting process and receive rewards whenever the agent’s pool is used to mint FAssets.
Withdrawing funds from a pool is similarly straightforward. Users can select the “Withdraw” option, specify the amount to remove, and confirm the action in their wallet.
Understanding Rewards for Collateral Providers
Rewards for collateral providers are influenced by several factors, including the size of the pool and the minting fees charged by the agent. Minting fees are commissions paid by users during the minting process, and a portion of these fees is distributed among collateral providers based on their share in the pool.
For instance, if a user’s funds constitute 20% of a pool and the pool’s minting fee is 10%, the user will receive a portion of the fee proportionate to their contribution. Rewards can be tracked and claimed via the FAssets platform, where users can choose to claim all available rewards at once or withdraw rewards from specific agents.
FAssets and Flare Network’s Growing Ecosystem
The FAssets project is a key element of the Flare Network’s strategy to enhance the functionality of non-smart contract tokens. On its first day of testing, the platform saw the minting of over 937,000 XRP.
Participants using FAssets can mint tokens such as FXRP (Flare-based XRP) on the Flare Network. These tokens are usable within the Flare ecosystem for various DeFi applications, including lending, staking, and yield farming. This capability extends the use of tokens beyond their original blockchain limitations. Flare founder Hugo Philion has assured that the forthcoming XRPL smart contracts functionality will not affect FXRP.
