XRPFi: A New Chapter of XRP in Decentralized Finance

Recently, the XRP Ledger Apex 2025 conference was held in Singapore, and the "XRPFi" concept has garnered widespread attention. This new model that combines XRP with Decentralized Finance (DeFi) is seen as an important way to activate XRP and promote the development of the XRPL ecosystem.

As one of the major assets in the crypto market, XRP currently has a market capitalization of approximately $134.4 billion, second only to Bitcoin, making it the highest-valued non-smart contract cryptocurrency. XRP has gained widespread application in traditional finance due to its fast and low-cost cross-border payment capabilities. However, due to the long-standing lack of smart contract support, XRP's performance in the on-chain Decentralized Finance ecosystem has been relatively lagging, and this contradiction has gradually become a focus of industry attention.

With the easing of related legal disputes, the market capitalization growth of the stablecoin RLUSD, and the market's expectations for the XRP ETF, investor enthusiasm for the future development of XRP is on the rise. An increasing number of institutional and individual investors are beginning to focus on how to enhance the yield and efficiency of XRP through Decentralized Finance, which has also driven the emergence of the "XRPFi" concept.

Flare Network: The Key Infrastructure of XRPFi

In the development process of XRPFi, Flare Network plays the role of a core infrastructure provider. Although the XRP Ledger (XRPL) performs excellently in terms of speed and stability, it has inherent limitations in the composability and smart contract functionalities required by Decentralized Finance. Flare empowers through technology, becoming an important bridge connecting the traditional XRPL with the multi-chain DeFi ecosystem.

Flare is an EVM-compatible Layer 1 blockchain that focuses on achieving multi-chain interoperability. Its FAssets protocol can map non-smart contract assets such as XRP to FXRP, enabling contract invocation capabilities and seamlessly integrating into decentralized lending, trading, and derivatives protocols. This allows XRP holders to participate in staking, liquidity mining, and other mainstream on-chain yield activities.

In addition, Flare has launched the USD₮0 stablecoin with native cross-chain interoperability. This stablecoin is issued based on LayerZero's OFT standard and, when paired with XRP, can not only be used to build trading depth pools and lending collateral but also connects to the USDT ecosystem with a market value exceeding 155 billion USD, injecting high liquidity into the XRPFi ecosystem.

Data shows that the Flare ecosystem has developed rapidly recently: as of June 10, its TVL has surpassed $157 million, mainly due to the launch of USD₮0, with a current supply of approximately $92.1 million. In the long term, Flare's TVL has grown over 400% in the past year. At the same time, Flare has integrated multiple wallet tools compatible with XRPL, further lowering the entry barrier for users.

Flare describes its XRPFi ecosystem as a "flywheel model": USD₮0 provides a source of funding, FXRP achieves contract composability, and the pairing of the two brings liquidity, which in turn attracts more Decentralized Finance applications and real-world use cases, ultimately enhancing the long-term ecological value of XRP.

In the future, Flare plans to introduce more non-smart contract assets into its ecosystem, expanding the application scenarios of these assets in the Decentralized Finance field.

Doppler Finance: Building the XRPFi Yield Matrix

At the same time, Doppler Finance has designed a comprehensive yield mechanism around XRP, aiming to make up for the shortcomings of XRP in yield generation and financial products. As of June 8, the platform has attracted over $30 million in TVL, becoming an important participant in the XRPFi space.

Doppler Finance primarily offers two types of yield products: CeDeFi yields and on-chain DeFi strategies. The former 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 reputable custodian, then transferred to the trading platform to implement quantitative strategies as planned. The profits are returned to the user's account after off-chain settlement.

In terms of on-chain yields, Doppler is actively connecting with the XRPL sidechain ecosystem, including EVM-compatible networks and emerging protocols. Its strategies include:

1. XRP Lending: Deposit XRP into an audited lending protocol to earn interest or native rewards. 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 (such as USDC), and 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 Strategy: Users can perform one-click leveraged staking in specific LST pools, particularly targeting sidechain tokens like ROOT. This mechanism simplifies the operation process through automated contracts, enhancing user experience.

To further reduce risk, Doppler Finance is constructing a risk-isolated lending market that allows different asset pools to operate independently, avoiding the impact of highly volatile assets on the overall system stability. In addition to the core pool containing mainstream assets such as XRP, USDC, and ROOT, Doppler Finance also plans to launch multiple isolated markets, including an LST pool specifically designed for leveraged yield farming and an isolated market containing gaming tokens.

Considering that XRPFi involves cross-chain asset management, custody, and advanced strategy execution, the security mechanism has become a key focus in the project design. Doppler Finance employs a multi-layer risk control mechanism, choosing leading industry service providers for asset custody, and ensuring asset safety through cold wallet management, on-chain verification, bankruptcy isolation, and other means. In terms of quantitative trading, the platform adopts a multi-strategy and multi-team collaboration model, designing most operations as "loan contract structures" to ensure the principal is recoverable under non-extreme circumstances.

In addition, all cooperating operators must undergo rigorous due diligence, including assessments of historical performance, strategy stability, AUM scale, and financial risks, in order to screen for qualified institutions to participate.

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

As the Ethereum DeFi ecosystem becomes increasingly saturated, the market has begun to focus on high market-cap assets that have not been fully activated. The emergence of XRPFi perfectly fills the long-standing gap of "high market cap, low chain use" for XRP. Through technologies such as the FAssets protocol on the Flare network, XRPFi enables XRP, which originally lacked smart contract capabilities, to enter the DeFi ecosystem. Doppler Finance is building a series of sustainable yield mechanisms, including CeDeFi yields and liquid staking, which not only provide a practical path but also invest resources to enhance security and user experience.

Logically, the development of XRPFi responds to the urgent need to activate XRP and promote the growth of its ecosystem. However, it should be noted that the current XRPFi ecosystem is still in its early stages. Although the product roadmap of Flare and Doppler is relatively clear, the overall user base, liquidity depth, and protocol maturity still need further verification. This attempt to integrate traditional assets into emerging financial models is worth ongoing attention for its future development.