Holders of XRP keen on yield options have swiftly adopted mXRP, the first liquid staking token inherent to its ecosystem.
On September 25, blockchain infrastructure provider Axelar announced that the initial vault containing 6.5 million tokens filled up within two days of its launch, prompting a cap increase to 10 million.
Significantly, the total value of assets secured in the vault is nearly $20 million.
This rapid growth underscores significant demand from investors looking to utilize idle XRP through decentralized finance.
What is mXRP?
mXRP aims to introduce new utility for XRP, an asset that has remained dormant for years, despite being one of the earliest cryptocurrencies.
Utilized on the XRP Ledger’s Ethereum Virtual Machine (EVM) sidechain, this token enables users to stake XRP via Midas, a tokenization platform. In exchange, participants receive a wrapped version—mXRP—with potential annual yields of up to 8%.
The process initiates when XRP is transferred to the sidechain and placed in tokenized vaults. These deposits are allocated into yield strategies managed by independent managers, termed “risk curators.”
Initially, Hyperithm assumed this role, directing funds towards market-making and liquidity provisions.
The outcomes of these strategies directly influence the value of mXRP, ensuring that holders receive returns in the token they possess.
Midas co-founder and CEO Dennis Dinkelmeyer articulated the mission to activate long-untapped capital.
He stated:
“Much of the XRP supply has been inactive for years; mXRP provides a straightforward mechanism for users to engage in on-chain strategies.”
Expanding XRP’s role in DeFi
Additionally, the project mirrors a broader initiative to enhance XRP’s versatility in decentralized markets.
The DeFi ecosystem for XRP lags significantly behind competitors like Ethereum, which boasts hundreds of billions in total value locked.
In this context, Sergey Gorbunov, co-founder of Axelar, highlighted that the protocol’s cross-chain framework enables XRP, traditionally limited to its own ledger, to interact with DeFi apps across various blockchains.
Moreover, other initiatives are making strides in this direction, including the recent introduction of Flare Network’s FXRP.
FXRP facilitates the use of XRP in lending, liquidity pools, and further DeFi applications without sacrificing exposure to the base asset.
