The new concept of XRPFi may activate the huge market capitalization of XRP and fill the shortfalls in the DeFi ecosystem.

Recently, the XRP Ledger Apex 2025 conference was held in Singapore, where the concept of "XRPFi" proposed at the conference sparked widespread discussion. XRPFi is the combination of XRP and Decentralized Finance (DeFi), and it is considered a new way to activate XRP, an established crypto asset, and promote the development of the XRPL and Ripple ecosystem.

XRP, as one of the important assets in the cryptocurrency market, currently has a market capitalization of approximately $134.4 billion, making it the highest non-smart contract cryptocurrency by market capitalization after Bitcoin. XRP has gained stable applications in the traditional financial sector due to its fast and low-cost cross-border payment capabilities. However, in the on-chain space, XRP has long lacked smart contract support, making it difficult to integrate into the mainstream Decentralized Finance ecosystem. This structural contradiction has gradually become a focal point of concern.

With the suspension of the lawsuit against Ripple, Ripple's stablecoin RLUSD nearing a market capitalization of $390 million, and the ongoing speculation about XRP ETFs, investor expectations for the future of XRP are gradually heating up. Some institutions and retail investors are starting to focus on how XRP can generate returns and enhance asset utilization efficiency through Decentralized Finance, driving the birth and development of the "XRPFi" concept.

Flare Network: The Key Infrastructure of XRPFi

In the current development of XRPFi, Flare Network is regarded as a key infrastructure provider. While the XRP Ledger (XRPL) performs excellently in terms of speed and stability, it has inherent limitations in the composability and contract functionalities required for Decentralized Finance. Therefore, Flare has chosen to technically empower XRP, becoming the core engine that connects the traditional XRPL with the multi-chain DeFi ecosystem.

Flare is an EVM-compatible L1 blockchain designed specifically for achieving multi-chain interoperability. Its FAssets protocol can map non-smart contract assets such as XRP to FXRP, enabling them to have contract call capabilities, thus seamlessly integrating into decentralized lending, trading, and derivatives protocols. With this mechanism, XRP holders can participate in mainstream chain yield activities, including staking and liquidity mining.

In addition, Flare has also introduced the USD₮0 stablecoin as a native asset issued based on the LayerZero OFT (Omnichain Fungible Token) standard, featuring native interoperability across chains. After pairing with XRP, USD₮0 can not only be used to build trading depth pools and lending collateral but also connect to the USDT ecosystem with a market capitalization of over $155 billion, injecting high liquidity as a "capital base" into the XRPFi ecosystem.

According to official data, the Flare ecosystem has seen significant growth recently: as of June 10, the TVL exceeded $157 million, mainly due to the launch of USD₮0, which currently has a supply of about $92.1 million. Looking at a longer time frame, from February 2024 to February 2025, Flare's TVL is expected to grow by over 400% year-on-year. At the same time, Flare has integrated several wallet tools compatible with XRPL, further lowering the barrier to entry for users.

Flare describes its XRPFi system as a "flywheel model": providing capital sources at USD₮0, with FXRP achieving contract composability, the pairing of the two brings liquidity, which in turn drives more Decentralized Finance applications and real-world scenarios, thereby feeding back into the long-term ecological value of XRP.

In the future, Flare also plans to bring other non-smart contract assets onto the platform, expanding its use cases in the DeFi field.

Doppler Finance: Building the XRPFi Yield Matrix

While building chain compatibility on Flare, Doppler Finance has designed a complete set of yield mechanisms around XRP, attempting to fill the gaps in XRP's past in terms of interest generation and financial products. As of June 8, the platform has attracted over $30 million in TVL, becoming one of the important participants in the XRPFi sector.

Doppler Finance offers two main types of yield products: CeDeFi yields and on-chain DeFi strategies. The former primarily manages assets through institutional-grade custody and quantitative operations, while the latter explores on-chain yield scenarios including lending, stablecoin strategies, and staking.

In the CeDeFi model, users deposit XRP into a dedicated address, and the assets are held by a custodian. They are then transferred to the trading platform as planned to carry out quantitative strategies such as arbitrage and basis trading. The earnings are settled off-chain and then returned to the user's account.

In terms of on-chain yield, Doppler is actively integrating with the XRPL sidechain ecosystem, including EVM-compatible networks and emerging protocols. Its strategy includes:

1. XRP Lending: Earn interest or native rewards by depositing XRP into an audit-compliant lending protocol. Borrowers use other assets as collateral, and the platform automatically manages the liquidation process to ensure security.
2. Stablecoin Yield Strategy: Use XRP as collateral to borrow stablecoins, then deploy them into stablecoin yield protocols. Doppler adopts a conservative LTV ratio and dynamically adjusts positions to achieve low-risk returns.
3. Liquidity Staking and Leverage Strategies: Users can perform one-click leveraged staking in specific LST pools, particularly around certain sidechain tokens. This mechanism simplifies cumbersome operational processes through automated contracts, enhancing user experience.

To further reduce risk, Doppler Finance is building a risk-isolated lending market that allows different asset pools to operate independently, thereby avoiding high-volatility assets from dragging down the overall system stability. In addition to the core pool that includes mainstream assets like XRP and USDC, Doppler Finance also plans to launch multiple isolated markets, including an LST pool designed specifically for leveraged yield farming, as well as isolated markets that include game tokens from the ecosystem.

Since XRPFi involves cross-chain asset management and advanced strategy execution, its security mechanism has become an important part of the project design. Currently, Doppler Finance adopts a multi-layer risk control mechanism.

In terms of asset custody, the platform selects top service providers in the industry and ensures asset security through measures such as cold wallet management, on-chain verification, and bankruptcy isolation. Regarding quantitative trading, the platform adopts a multi-strategy, multi-team collaboration model and designs most operations as "lending contract structures" to ensure that the principal can be recovered in non-extreme situations.

In addition, according to official sources, all cooperative operators must undergo rigorous due diligence, including assessment of historical performance, strategy stability, AUM scale, and financial risk dimensions, to select qualified institutions to participate.

XRPFi: Filling the gap in the DeFi market, still in the early stages

With the intensification of the Ethereum DeFi ecosystem, the market is shifting its focus to high market capitalization assets that have yet to be fully activated. The emergence of XRPFi fills the long-standing gap of "high market capitalization, low chain usage" for XRP. XRPFi enables XRP, which originally lacked smart contract capabilities, to enter the DeFi ecosystem through technologies such as the FAssets protocol on the Flare network. Doppler Finance is building a comprehensive and sustainable yield mechanism that includes CeDeFi yields and liquid staking, which not only has a real pathway but also invests resources to enhance security and user experience.

Logically speaking, the development of XRPFi responds to the urgent demand generated by the activation of XRP and the development of the Ripple ecosystem. However, it should be noted that the current XRPFi ecosystem is still in its early stages. The product roadmaps of Flare and Doppler are relatively clear, but the overall user scale, liquidity depth, and protocol maturity still need to be verified. How will old assets integrate into new narratives? The answer to this question will take time to verify.