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, worth around $3 billion, are held in Xaman wallets and are largely excluded from decentralized finance (DeFi). Accessing DeFi means downloading new wallets, linking assets across chains, managing gas tokens, and navigating unfamiliar interfaces. Most holders never bothered with it.
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 curated vault on the Flare blockchain.
The system relies on three components working in the background.
First there are FAssets, which create a trust-minimized representation of XRP on Flare – effectively a wrapped version of the token that can interact with smart contracts. Next are Flare Smart Accounts, which eliminate the need for users to manage a second wallet. Instead of juggling private keys across chains, users authorize transactions with their existing XRPL credentials. Finally, Xaman acts as a front-end, integrating the process directly into 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 has detailed instructions. Flare’s data connector validates the request, while intelligent account controllers manage the creation of the wrapped asset, allocation into vault strategies, and any subsequent yield distribution. What would typically require linking 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,” said Wietse Wind, founder of Xaman, in a statement to CoinDesk.
The vault strategies themselves are managed by Upshift and organized by Clearstar, which oversees capital deployment and risk management. Although specific return targets have not been disclosed, the strategies are built around familiar DeFi primitives such as lending markets, collateralized positions, and structured products.
There are early signs that XRP holders are ready to experiment. Flare’s FXRP – its existing wrapped XRP token – has surpassed 100 million issued offerings, with over 60 million currently deployed in staking programs and structured products. This growth suggests at least some appetite for making XRP work, rather than leaving it idle.
The broader context makes the timing remarkable. XRP rose 6% earlier this week amid a 212% increase in retail buying volume, and exchange-traded fund inflows have remained positive since their launch in November. Yet much of this activity reflects directional bets on price.
For XRP’s DeFi ambitions – sometimes dubbed “XRPFi” – the biggest challenge has been usability, not demand. If billions of dollars worth of tokens are indeed locked in friction, reducing that friction may be more important than another rally. The infrastructure that turns passive holdings into productive capital could determine whether XRP’s DeFi narrative evolves beyond branding.
