XRP’s DeFi Leap: How Liquid-Staking Token mXRP Expands Utility
Recent developments in the XRP ecosystem mark a turning point: the launch of mXRP, a liquid-staking token, may substantially deepen XRP’s role in decentralized finance. Market analyst Doshsai argues that this innovation could unlock latent value in XRP’s large idle supply and bring it firmly into DeFi’s reward economy.
What is mXRP and Why It Matters
Unveiled at XRPL Seoul 2025 by Midas and Interop Labs, mXRP is the first-ever liquid staking product built for the XRP ecosystem. It allows XRP holders to stake their tokens without surrendering liquidity: instead of locking up dormant XRP, users mint mXRP, a derivative representation that can be deployed into DeFi strategies.
Through audited smart contracts on the XRPL EVM sidechain, it bridges in native XRP via Axelar, wraps it, and issues mXRP under a tokenized certificate framework.
Yield & Use-Cases
mXRP isn’t just theoretical utility, it promises yield. The target return is 6-8% APY, depending on the underlying strategy, suhc as market-making, liquidity provisioning, and lending.
This is significant in that many XRP tokens have been dormant, held in wallets without generating any return. With mXRP, capital efficiency could improve across the board for holders.
Expansion into DeFi & Cross-Chain
According to Doshsai, what’s especially transformative is that mXRP serves as a bridge between XRP’s longstanding strength in payments, settlement, and cross-border and what DeFi has been doing on chains, such as Ethereum and Solana.
The integration to XRPL’s EVM sidechain and Axelar’s bridging capabilities makes mXRP usable in DeFi protocols. That means holders can move beyond storing XRP into using it for yield, collateral, swaps, liquidity pools, and other financial undertakings.
XRP Faces Imminent Supply Shock Ahead of Bitcoin, Says WisdomTree
According to crypto observer SMQKE, investment firm WisdomTree has highlighted that a major supply shock for XRP could arrive long before Bitcoin faces the same challenge.
While Bitcoin’s fixed supply of 21 million units will not be fully mined until around the year 2140, XRP’s total supply cap is expected to be reached within the next few years, creating significant implications for the digital asset market.
A supply shock happens when an asset’s availability contracts while demand stays steady or climbs, driving prices higher. Bitcoin has long leaned on this narrative as ‘digital gold,’ but XRP’s quicker path to max supply could push it into the spotlight even sooner.
Unlike Bitcoin’s proof-of-work mining, XRP was fully pre-mined at inception with a fixed cap of 100 billion coins. Its supply is released through Ripple Labs’ monthly escrow system, most of which is already in circulation. As the escrow reserves decline, WisdomTree notes XRP could encounter scarcity far sooner than Bitcoin.
If XRP reaches its supply cap within the next few years, the resulting scarcity could shift investor perception, drawing institutional interest and fueling demand.
While Bitcoin has long owned the store-of-value narrative through its halving cycles and fixed cap, XRP’s faster path to maximum supply could redefine it as more than a utility token.
Conclusion
While Bitcoin’s scarcity narrative stretches over the next century, XRP’s supply timeline is rapidly approaching its critical juncture.
A looming supply shock could redefine XRP’s role in the crypto ecosystem, shifting it from a utility-driven token to a scarce digital asset with heightened investment appeal.
Meanwhile, the launch of mXRP places XRP at the core of liquidity, yield generation, and decentralized innovation. By allowing holders to earn returns while keeping assets active in DeFi, it marks a shift from passive speculation to tangible financial utility.
If successful, mXRP could elevate XRP beyond its role as a settlement token, positioning it as a cornerstone of cross-chain DeFi.
Source: https://coinpaper.com/11230/m-xrp-ignites-xrp-de-fi-wisdom-tree-predicts-imminent-xrp-supply-shock-before-bitcoin
