$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 about $3 billion, are held in Xaman wallets and are largely excluded from decentralized finance (DeFi). Getting into DeFi means downloading new wallets, bridging assets between chains, managing gas tokens, and navigating unfamiliar interfaces. Most keepers have never had any problems 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 funds $XRP directly into a curated vault on the Flare blockchain.
The system relies on three components that work in the background.
First, there are FAssets, which create a trust-minimized representation of $XRP on Flare – essentially a packaged version of the token that can interact with smart contracts. Then come Flare Smart Accounts, which remove the need for users to manage a second wallet. Instead of juggling private keys across different chains, users authorize transactions using their existing XRPL credentials. Finally, Xaman acts as a front-end and integrates the process directly into the wallet $XRP already use holders.
From the user’s perspective, the process is reduced to a single action. Behind the scenes, the transaction contains detailed instructions. Flare’s Data Connector validates the request, while Smart Account controllers handle packing of the packed asset, assignment to vault strategies, and any subsequent revenue distribution. What typically requires bridging assets, acquiring gas tokens, and interacting with multiple decentralized applications is compressed into a single workflow.
“This integration lets our users explore new options directly from the wallet they already know, while maintaining full control over their keys and decisions,” said Wietse Wind, founder of Xaman, in a statement to CoinDesk.
The vault strategies themselves are managed by Upshift and put together by Clearstar, which oversees capital deployment and risk management. While specific return targets have not been disclosed, the strategies are built around well-known DeFi primitives such as credit markets, collateral positions and structured products.
There are early signs of that $XRP holders are willing to experiment. Flare’s FXRP – the existing packaging $XRP token – has surpassed 100 million minted supply, of which more than 60 million are currently being staked in staking programs and structured products. That growth at least indicates some willingness to putt $XRP to work, instead of letting it stand still.
The broader background makes the timing remarkable. $XRP rose 6% earlier this week amid a 212% spike in retail purchasing volume, and exchange-traded fund inflows have remained positive since its launch in November. Still, much of that activity reflects directional bets on price.
For $XRP‘s DeFi ambitions – also called “XRPFi” – the bigger challenge was usability, not demand. If billions of dollars worth of tokens are actually stranded by friction, reducing that friction could be more important than another rally. Infrastructure that converts passive assets into productive capital could determine whether this is the case $XRPThe DeFi story of DeFi goes beyond branding.