XRP has a liquidity problem that has nothing to do with price: more than 2 billion tokens, or about 3.5% of the circulating supply, are not actually circulating.
The tokens, valued at around $3 billion, are held in Xaman wallets and are largely excluded from decentralized finance (DeFi). Accessing DeFi means downloading new wallets, connecting assets cross-chain, managing gas tokens, and navigating unfamiliar interfaces. Most possessors never bothered.
Now, Xaman said it has reached an agreement with the Flare blockchain that will reduce the process to a single transaction, allowing users to deposit their XRP directly into a selected vault on the Flare blockchain.
The system is based on three components that work in the background.
First are FAssets, which create a trust-minimized representation of XRP in Flare, effectively a packaged version of the token that can interact with smart contracts. Next come Flare Smart Accounts, which eliminate the need for users to manage a second wallet. Instead of juggling cross-chain private keys, users authorize transactions with their existing XRPL credentials. Finally, Xaman acts as an interface, integrating the process directly within the wallet that many XRP holders already use.
From the user’s perspective, the process is reduced to a single action. Behind the scenes, the transaction carries detailed instructions. Flare’s data connector validates the request, while smart account controllers handle the minting of the wrapped asset, allocation into vault strategies, and any subsequent yield distributions. What would normally require pooling assets, acquiring gas tokens, and interacting with multiple decentralized applications is compressed into a single workflow.
“This integration allows our users to explore new options directly from the wallet they already know, while maintaining full control of their keys and decisions,” Wietse Wind, founder of Xaman, said in a statement to CoinDesk.
The vault strategies themselves are managed by Upshift and curated by Clearstar, which oversees capital deployment and risk management. While no specific performance targets were revealed, the strategies are based on familiar DeFi primitives such as lending markets, collateralized positions, and structured products.
There are early signs that XRP holders are willing to experiment. Flare’s FXRP, its existing wrapped XRP token, has surpassed 100 million in minted supply, with over 60 million currently deployed in staking programs and structured products. That growth suggests at least some appetite to put XRP to work, rather than leave it idle.
The broader context makes the moment notable. XRP rose 6% earlier this week amid a 212% increase in retail purchasing volume, and exchange-traded fund inflows have remained positive since their launch in November. However, much of that activity reflects directional bets on price.
For XRP’s DeFi ambitions, sometimes referred to as “XRPFi,” the biggest challenge has been usability, not demand. If billions of dollars worth of tokens are effectively stranded by friction, reducing that friction may be more important than another rally. The infrastructure that converts passive holdings into productive capital could determine whether XRP’s DeFi narrative evolves beyond the brand.
