XRP Supply Shock Looms as Axelar and Flare Target 8B Tokens for Staking

Andrew Chen
XRP

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  • Axelar and Flare aim to lock up to 8B XRP, or 13% of supply.
  • Coinbase’s XRP balance dropped from 970M to just 32M in months.
  • Institutional adoption and ETFs could tighten supply further.

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The circulating supply of XRP could face significant strain if two ambitious staking projects meet their goals. Analysts warn this could accelerate a looming supply shock in the market.

Axelar and Flare Target Billions in Locked XRP

Axelar recently launched mXRP, a yield-bearing product designed to lock XRP into staking protocols. Georgios Vlachos, co-founder of the Axelar Foundation, said the team aims to manage $10 billion worth of XRP — roughly 5% of the current circulating supply.

Meanwhile, Flare’s co-founder Hugo Philion shared an equally aggressive target, revealing plans to secure 5 billion XRP on Flare’s network by mid-2026 through FXRP. If both projects succeed, nearly 13% of XRP’s circulating supply could be locked up, dramatically reducing available liquidity.

Early Days for mXRP, But Ambitions Run High

Despite these lofty goals, mXRP remains in its infancy. The project, unveiled at XRP Seoul 2025, currently holds just under 4 million XRP — a fraction of the supply and far from its $10 billion benchmark. Still, with time to grow, Axelar’s roadmap highlights the appetite for expanding XRP’s DeFi footprint.

Exchange Reserves Shrink as Institutions Accumulate

The potential squeeze comes as exchange reserves continue to decline. Coinbase, once holding nearly 1 billion XRP across multiple wallets, now manages only 32 million XRP. Analysts suggest supply on exchanges is drying up, with Ripple’s own escrow and insider holdings accounting for nearly 44% of total supply.

Also Read: Thailand’s SEC Ranks XRP #1 Again — Can It Stay Ahead of Bitcoin?

Institutional adoption is also gaining ground. Purpose ETF and Canadian firm 3iQ collectively hold over 74 million XRP, and analysts expect major banks and future XRP ETFs to further reduce liquid supply.

With Axelar and Flare setting aggressive XRP staking targets and institutional demand rising, the stage is being set for a potential supply crunch. While early numbers remain small, the combination of shrinking exchange balances, locked supply, and new ETF demand could make XRP one of the most tightly held digital assets in the years ahead.

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Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.

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