XRPFi: A New Path to Activate XRP's Huge Market Capitalization

Recently, the XRP Ledger Apex 2025 conference was held in Singapore, and "XRPFi" became the hot topic of discussion. This concept combines XRP with decentralized finance ( DeFi ) and is seen as a new direction to activate XRP, an established cryptocurrency asset, and promote the development of the XRPL and Ripple ecosystem.

XRP, as a non-smart contract cryptocurrency with a market capitalization second only to Bitcoin, has stable applications in the traditional financial sector. However, due to the lack of smart contract support, XRP struggles to integrate into the mainstream DeFi ecosystem, and this contradiction is becoming increasingly prominent. With improvements in the regulatory environment, the development of stablecoins, and rising expectations for ETFs, investors are beginning to pay attention to how XRP can enhance asset efficiency through DeFi.

Flare Network: The Infrastructure of XRPFi

Flare Network plays a key role in the development of XRPFi. As an EVM-compatible L1 blockchain, Flare maps XRP to FXRP through the FAssets protocol, granting it contract call capabilities and achieving seamless integration with the DeFi ecosystem. As a result, XRP holders can participate in staking, liquidity mining, and other on-chain activities.

Flare has also introduced the USD₮0 stablecoin, which is issued as a native asset based on the LayerZero OFT standard. USD₮0 paired with XRP can not only be used to build trading pools and collateral for lending but also connect to the USDT ecosystem, injecting liquidity into XRPFi.

Data shows that the Flare ecosystem has seen significant growth recently, with a TVL exceeding $157 million. From February 2024 to February 2025, its TVL has increased by over 400% year-on-year. Flare has also integrated several wallet tools compatible with XRPL, lowering the barriers for user entry.

Flare describes its XRPFi system as a "flywheel model": USD₮0 provides the source of capital, FXRP achieves contract composability, and the pairing of the two brings liquidity, thereby driving more DeFi applications and real-world scenarios, ultimately enhancing the long-term ecological value of XRP.

Doppler Finance: Building the XRPFi Yield Matrix

Doppler Finance has designed a complete yield mechanism around XRP to address the shortcomings of XRP in terms of earning interest and financial products. The platform offers two main types of yield products: CeDeFi yield and on-chain DeFi strategies.

In the CeDeFi model, after users deposit XRP, the assets are held by professional custodians and quantitative strategy operations are conducted on centralized trading platforms. Regarding on-chain yields, Doppler is actively integrating with the XRPL sidechain ecosystem, including XRP lending, stablecoin yield strategies, liquidity staking, and leverage strategies.

To reduce risk, Doppler Finance is building a risk-isolated lending market that allows different asset pools to operate independently. In addition to the core pool, there are plans to launch an LST pool specifically designed for leveraged yield farming, as well as an isolated market that includes gaming tokens.

In terms of security mechanisms, Doppler Finance adopts a multi-layer risk control approach. Asset custody is provided by leading service providers in the industry, ensuring safety through cold wallet management and on-chain verification. The quantitative trading employs a multi-strategy and multi-team collaboration model, with most operations designed as "loan contract structures" to ensure the safety of the principal.

The Prospects and Challenges of XRPFi

The emergence of XRPFi fills the gap of "high market capitalization and low chain usage" for XRP, injecting new vitality into this veteran crypto asset. However, the XRPFi ecosystem is still in its early stages, and aspects such as user scale, liquidity depth, and protocol maturity need time to be validated.

As the Ethereum DeFi ecosystem becomes increasingly competitive, the market is turning its attention to high market capitalization assets that have yet to be fully activated. Whether XRPFi can become the key to activating XRP and promoting the development of the Ripple ecosystem remains to be seen.