Derive accepts FXRP as collateral for XRP options

Flare announced on Aug. 12 that Derive now accepts FXRP as collateral for XRP options, perpetual futures and spot trades. Users can open positions directly from self-custodial wallets while the XRP that backs FXRP remains on the XRP Ledger.

FXRP is an overcollateralized onchain representation of XRP created after Flare’s FAssets system went live on mainnet in September 2025. Holders can redeem FXRP for the underlying XRP, which lets the token interact with smart contracts while preserving the ledger backing.

Derive combines protocol-level settlement with an offchain order book operated by Derive Trading Co. Professional market makers can post bids and offers across multiple strikes and expirations while users keep custody of their assets. The platform uses a multiasset collateral framework and USDC as the quote asset.

XRP options on Derive are cash-settled in USDC. At expiration gains or obligations change a trader’s USDC balance rather than delivering XRP or FXRP. Perpetual futures are also available and carry ongoing funding payments that move relative prices toward spot.

Portfolio Margin V2 evaluates combined account positions by modeling price and volatility shocks, applying collateral adjustments and accounting for contingencies such as perpetual funding or uncovered short options. The method can reduce collateral needs for offsetting positions. Accounts that fall below maintenance requirements are subject to automatic liquidation.

Option sellers collect premiums and accept contractual settlement obligations; option buyers risk losing the premium if contracts expire worthless. Perpetual positions create open-ended exposure and require ongoing margin management; insufficient collateral can trigger forced closures. Traders must monitor margin levels, funding payments and market moves because losses in one position reduce collateral available to the rest of the account.

FXRP has been added to other parts of Flare’s decentralized finance ecosystem since FAssets went live. The token was listed in new spot pairs on Hyperliquid in 2026 and entered permissionless lending markets powered by Morpho, where holders can supply FXRP as collateral or borrow stablecoins without selling their XRP exposure.

DeFi analyst Will Procheska commented, “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 stays on the XRP Ledger.” Derive founder and CEO Nick Forster noted, “Options are often the last major market to develop around an asset. FXRP gives one of crypto’s largest holder bases a credible path onchain, and adding Derive’s options markets means capital can be hedged, used to earn premium and traded with comparable sophistication.”

Derive’s onchain protocol and USDC settlement differ from regulated U.S. futures products. CME Group began trading options on XRP futures in October 2025 with contracts that settle into their corresponding futures. Flare and Derive are also exploring strategy vaults that could automate options-based yield strategies for FXRP holders.