XRP's Dormant $180B Awakened: 8 Billion Tokens Mobilized for DeFi

The XRP ecosystem is undergoing a transformative shift as Axelar and Flare Networks introduce initiatives poised to unlock over 8 billion tokens of dormant XRP supply. Midas, in collaboration with Axelar, has launched mXRP, a tokenized yield product offering XRP-denominated returns of up to 8% annually through DeFi strategies. The product, built on the XRP Ledger EVM (XRPL EVM), allows users to deposit XRP as collateral into a smart contract-based structure managed by third-party curators like Hyperithm. This innovation enables XRP holders to access liquidity across 80+ blockchains, leveraging Axelar’s cross-chain infrastructure to integrate with lending, borrowing, and market-making protocols.

Flare Networks complements this movement with its XRP-backed stablecoin initiative, which leverages Collateralized Debt Positions (CDPs) to tokenize XRP into FXRP and stXRP. The project, set to launch on September 19, aims to expand XRP’s utility in DeFi by enabling stablecoin issuance and yield generation through mechanisms like Stability Pools and FTSO (Flare Time Series Oracle). These developments align with broader efforts to activate XRP’s $180 billion market cap, much of which has remained idle due to limited native yield opportunities.

Axelar’s role as a cross-chain bridge is critical, enabling XRP to interact with DeFi protocols across diverse networks. By tokenizing XRP on XRPL EVM, Axelar facilitates seamless integration with decentralized applications, enhancing composability and scalability. Midas CEO Dennis Dinkelmeyer emphasized that mXRP provides a “clear channel” for XRP holders to engage in on-chain strategies, noting that demand for yield-generating products could drive broader adoption of XRP in institutional and retail markets.

The implications for XRP’s supply dynamics are significant. With over 8 billion tokens targeted for activation, these initiatives could reduce the proportion of dormant XRP, potentially increasing its liquidity and utility. Analysts highlight that mXRP’s design—combining smart contract-driven yield with cross-chain accessibility—positions it as a benchmark product in the XRP ecosystem. Additionally, Flare’s stablecoin framework introduces new use cases for XRP in collateralized lending and stablecoin issuance, further diversifying its financial applications.

While the projects remain in early stages, their potential to reshape XRP’s role in DeFi is clear. By addressing historical limitations in yield generation and interoperability, Axelar and Flare are fostering a more dynamic XRP ecosystem. However, challenges such as regulatory compliance and market volatility underscore the need for cautious participation. As the XRP community evaluates these innovations, their success could signal a broader shift toward tokenized finance, with XRP emerging as a foundational asset in decentralized markets.