XRP News Today: Structural Shift in XRP Supply as DeFi Lockups Target 13% Float

XRP's circulating supply faces a structural shift as two blockchain initiatives-Axelar and Flare Networks-aim to lock up approximately 8 billion XRP, representing roughly 13% of the asset's current float. The moves, framed as programmatic encumbrances rather than permanent token destruction, could tighten liquidity and amplify price pressures in the near term.

Axelar's newly launched mXRP product targets 5% of XRP's circulating supply, equivalent to 3 billion tokens, through custodied vaults and cross-chain strategies. Co-founder Georgios Vlachos explicitly stated the goal during a recent X Space, emphasizing the product's focus on "XRP-denominated yield strategies" for decentralized finance (DeFi) integration. Meanwhile, Flare Networks aims to mobilize 5 billion XRP onto its network by mid-2026 via FXRP wrapping and over-collateralized stablecoin lending. Flare CEO Hugo Philion described the effort as a means to activate "idle XRP" in institutional-grade DeFi infrastructure.

Both projects employ mechanisms that shift XRP balances from exchange inventories into bridges, automated market makers (AMMs), and collateralized debt positions (CDPs). For example, mXRP generates yield by locking XRP in programmatic vaults, while Flare's FXRP relies on CDP-style borrowing to sequester native XRP as collateral. These strategies reduce the free float competing on centralized order books, even if the locked tokens remain technically reversible.

The combined impact hinges on execution. With XRP's circulating supply near 59.7–60.0 billion, Axelar's 3 billion target and Flare's 5 billion ambition would collectively remove ~13% of the current float. Analysts note that if stickiness in these mechanisms proves high, the tradable supply could compress significantly, creating a "supply shock" scenario. Digital Asset Investor highlighted the implications, stating that "just these two projects alone could contribute to the supply shock" anticipated by the community.

Market reactions remain mixed. At press time, XRP traded at $2.87. While early adoption metrics for mXRP are modest-holding only 3.851 million XRP as of September 24-the product is in its infancy. Flare's FXRP, meanwhile, has a weekly minting cap of 5 million tokens to ensure gradual deployment.

The initiatives align with broader efforts to expand XRP's utility beyond cross-border payments. By enabling yield generation and DeFi participation, both projects aim to transform XRP into a programmable asset. However, risks persist, including product-market fit, custody controls, and regulatory scrutiny. If successful, the shift could position XRP as a key player in cross-chain liquidity, though outcomes remain contingent on user adoption and ecosystem maturity.