FAssets V1.1: Boosting liquidity, efficiency and growth ahead of V2
Flare Labs has introduced FAssets V1.1 as a crucial bridge between V1 and V2, enhancing liquidity, efficiency, and accelerating market adoption ahead of the full transition to V2. This next evolution will leverage the Protocol Managed Wallet, outlined in Flare’s 2.0 vision — a TEE-operated system designed to enable more efficient and automated asset minting.
Immediate Benefits of FAssets v1.1
- Unlimited minting – v1.1 enables unlimited minting of FXRP, significantly increasing its availability on Flare. This is essential for FAssets adoption and overall ecosystem growth.
- Capital efficiency – By reducing the capital intensity seen in v1, v1.1 makes the system more efficient and viable for broader adoption. It also eases the burden on agents maintaining the required collateral due to fluctuating assets prices and high minting rate.
- Faster deployment – Since v1.1 retains most of the v1 codebase, it requires significantly less testing, allowing for an earlier launch and ensuring FXRP is widely available well before late summer.
- Continued use on Songbird – Due to its improved capital efficiency, FAssets in v1.1 can remain on Songbird even after its launch on Flare.
- Additionally, the timely deployment of v1.1 is critical for the adoption of Flare’s ecosystem and the upcoming XRP staking mechanism. XRP staking is expected to go live around the same time as FXRP v1.1. For staking to function effectively, a viable market must exist between FXRP and the XRP Liquid Staked Token (LST). V1.1 is essential for enabling this, making its launch a crucial step in the ecosystem’s development.
Core Vault: Key innovation in V1.1
One of the key innovations of V1.1 is the Core Vault, a liquidity hub that helps agents free up capital, facilitates large FXRP redemptions, and ensures greater stability in the system.
Key functions of the Core Vault
- Liquidity enhancement for agents
Agents can deposit XRP into the Core Vault to unlock their FLR collateral on Flare. This freed-up collateral can be used to mint more FXRP or for other purposes. Conversely, agents can withdraw XRP from the vault by locking more FLR as collateral. - Direct user redemptions
Users with larger FXRP holdings can redeem FXRP and receive XRP directly from the Core Vault. Unlike agent-based redemptions, these transactions take longer and require KYC approval but facilitate large transfers effectively. - Multi-layered security
The Core Vault is secured through a combination of escrow accounts that time-lock vault funds and the cooperation of trusted entities via multi-signature authorization, providing FAssets with a decentralized reserve to back the system and ensure transaction integrity. XRP funds are stored in escrow accounts, with portions released daily to minimize security risks. If a security threat is detected, the Flare Foundation can activate Alert Mode, freezing operations to prevent unauthorized access. Additionally, active bug bounties are being conducted on Immunefi, with several audits currently in progress.
Detailed specifications of the Core Vault are outlined in Flare Labs' technical blog on FAssets V1.1.
Looking ahead, FAssets V2 and the Protocol Managed Wallet whitepaper will be released soon, detailing how FAssets will enable even more efficient and secure non-smart contract assets minting, playing a key role in building and expanding a thriving Flare DeFi ecosystem for XRP and beyond.