XRP Holders Could Soon Earn Yield on Idle Tokens
Flare, an EVM-based protocol, is teaming up with Firelight to give XRP holders a way to earn yield—something that’s been missing for years. According to a recent interview with Scott Melker (better known as the Wolf of All Streets), returns could range between 4% and 7% annually. That’s not earth-shattering, but for an asset that’s traditionally just sat there, it’s something.
Hugo Philion, Flare Labs’ CEO, and Jesus Rodriguez from Firelight explained how this works. Basically, they’re building decentralized finance (DeFi) tools that let XRP holders lend, borrow, and—finally—earn passive income. Philion pointed out that this turns a “static asset into one that creates returns,” though he was quick to add that it’s not without risks.
How It Works (And Why It’s Different)
The key here is FXRP, Flare’s wrapped version of XRP. Unlike some other bridges, Flare’s system doesn’t rely on centralized custodians. Validators secure the network, which Philion argues makes it more decentralized. That said, he admitted most retail users will probably still access yield through exchanges—even if Flare itself isn’t custodial.
Rodriguez shared some numbers from early tests. The 4%-7% range isn’t guaranteed, of course, but it’s a start. He seemed especially excited about restaking, which could open doors for more complex DeFi products. “XRP has always had a zero cost of capital,” he said. “This changes that.”
Mixed Reactions from the XRP Community
Not everyone’s convinced, though. Brad Kimes, from Digital Perspectives, called it “the biggest unlock of idle liquidity in crypto,” comparing it to bond-like returns. Bill Morgan, a well-known attorney in the space, agreed, saying even modest yields would be a win for long-term holders.
But Vet, a validator on the XRP Ledger, wasn’t sold. “It’s not worth it for volatile assets,” he argued, pointing out that 7% might not justify the risks of dealing with third parties. He’d want much higher returns—or better yet, DeFi that moves beyond “gambling and yield chasing.”
Morgan countered with an idea: What if holders could lock up XRP long-term and borrow against it when needed? That way, they wouldn’t have to sell. It’s a fair point, but as he admitted, nobody’s built that yet.
For now, the 4%-7% offer is on the table. Whether XRP holders take it—or wait for something better—remains to be seen.
