Is XRP Undervalued in the Evolving DeFi Ecosystem?

The question of whether XRP is undervalued in the DeFi ecosystem hinges on a nuanced comparison of its market fundamentals, adoption trajectory, and TVL performance against emerging platforms like IoTeX (IOTX). While XRP's institutional credibility and cross-border utility anchor its value, its DeFi footprint remains a fraction of its total market cap. Meanwhile, IoTeX's nascent DeFi ecosystem, though smaller, is betting on AI integration and DePIN innovation. Let's dissect the numbers.

XRP: A Legacy of Institutional Adoption

XRP's market capitalization of $115.4 billion as of December 2025 according to TradingView reflects its dominance in cross-border payments, with over 300 financial institutions leveraging Ripple's technology as reported by Changelly. Its price of $1.91 per token, however, is 42% below its January 2025 peak, raising questions about whether this dip signals undervaluation or a correction in speculative fervor. The token's utility extends to DeFi via wrapped XRP (wXRP), enabling interoperability with Ethereum and Solana as noted in the report. Yet, the XRP Ledger's DeFi TVL of $64.4 million pales in comparison to its overall market cap, suggesting that DeFi adoption remains a secondary use case for the asset.

This dichotomy highlights a key tension: XRP's value is largely derived from its role in traditional finance (TradFi) corridors, while its DeFi potential is still nascent. For investors, the question becomes whether this traditional utility justifies its valuation or if the token is being unfairly discounted for its limited DeFi participation.

IoTeX: A Rising Star in DePIN and AI

IoTeX (IOTX), by contrast, operates in a different stratum of the DeFi ecosystem. With a market cap of $66.65 million and a TVL of $5.57 million according to DeFi Llama, it's a far smaller player but one with a distinct focus on decentralized physical infrastructure networks (DePIN) and AI-driven use cases. The platform's recent block time reduction to 2.5 seconds and 2,000 transactions per second as detailed in the report position it as a high-throughput alternative for niche applications.

However, IoTeX's metrics tell a mixed story. While its daily active wallets grew 872% YoY, they declined 26% QoQ to 6,600 according to DeFi Llama, indicating volatility in user engagement. Price predictions for IOTX range from $0.021 to $0.053 in 2025 as forecasted by StealthX, driven by speculative bets on DePIN's growth. For now, IoTeX's TVL remains a fraction of XRP's, but its focus on emerging sectors could position it as a disruptor if DePIN adoption accelerates.

The TVL Divide: XRP's DeFi Ambitions vs. IoTeX's Niche Play

Total Value Locked (TVL) is a critical metric for assessing DeFi adoption. XRP's $64.4 million TVL on the XRP Ledger as reported by CryptoSlate dwarfs IoTeX's $5.57 million according to DeFi Llama, but both pale against the broader DeFi market's $122 billion TVL as noted by Phemex. This gap underscores a key challenge: XRP's DeFi ecosystem is still in its infancy, with most value locked in stablecoin activity and real-world asset tokenization as stated by CryptoSlate.

Meanwhile, IoTeX's TVL, though smaller, reflects a more concentrated effort to capture niche markets. Its recent upgrades and AI integration could attract developers and users seeking high-speed, low-cost solutions for IoT and AI applications. For XRP, the challenge is to replicate this focus while leveraging its institutional partnerships to bridge TradFi and DeFi.

Valuation: XRP's "Discount" vs. Market Realities

XRP's current valuation appears to reflect a discount to its institutional potential. At $1.91 per token, it trades at a significant discount to its 2025 peak, despite maintaining a dominant position in cross-border payments. Some analysts argue this undervaluation is temporary, citing potential catalysts like spot ETF approvals and institutional inflows that could push the price toward $10 by 2026 as suggested by Fool.

However, such optimism must be tempered by the reality that DeFi TVL alone cannot justify XRP's market cap. The token's value is tied to its role in TradFi, where it has already achieved scale. In contrast, IoTeX's valuation is more speculative, relying on unproven DePIN and AI use cases. While this could pay off handsomely, it also exposes investors to higher volatility.

Conclusion: A Tale of Two Tokens

XRP's undervaluation, if it exists, is not a function of its DeFi potential but rather its underutilization in decentralized finance. Its TVL is growing, but it remains a small fraction of its total market cap. For XRP to fully realize its value, it must either expand its DeFi footprint or maintain its dominance in TradFi corridors. IoTeX, meanwhile, represents a high-risk, high-reward bet on the future of DePIN and AI-driven DeFi.

Investors should weigh these dynamics carefully. XRP offers stability and institutional credibility but lacks the disruptive edge of newer platforms like IoTeX. Conversely, IoTeX's growth potential is compelling but comes with the risks of a nascent ecosystem. In the evolving DeFi landscape, the answer to whether XRP is undervalued may depend on where one believes the industry is headed: toward institutional integration or radical decentralization.