About 129 million of 145 million FXRP sit in DeFi protocols, but a small token base and inflation that still dwarfs fee burns leave Flare’s bigger data-layer ambitions unproven. Nearly all of
About 129 million of 145 million FXRP sit in DeFi protocols, but a small token base and inflation that still dwarfs fee burns leave Flare’s bigger data-layer ambitions unproven.
Nearly all of the XRP that holders have wrapped onto Flare is now working inside DeFi instead of sitting in wallets. A DefiLlama Research report published October 21 counts about 129 million of the 145 million FXRP in circulation deployed across protocols, close to 90% of supply.
The base is still small. According to the report, 145 million FXRP equals roughly 0.23% of circulating XRP. The deployment ratio matters anyway, because it measures demand for using XRP as productive capital, something the XRP Ledger cannot offer on its own without general smart contracts.
FXRP went live on Flare mainnet in September 2025 through FAssets, an overcollateralized bridge. A user sends XRP to an agent, Flare’s Data Connector confirms the payment on the XRP Ledger, and an equivalent token is minted on Flare. Agents back the tokens with stablecoin or ETH collateral plus FLR, and holders can redeem for native XRP. Version 1.3, released in May 2026, cut minting to a single XRPL payment, which let regulated custodians such as Hex Trust integrate directly.
Lending is where most of the supply goes. DefiLlama puts about 52% of deployed FXRP in lending markets: Morpho and Kinetic on Flare, Morpho on Ethereum and Euler on Monad. Most of it is posted as collateral, so holders can borrow cash while keeping their XRP price exposure. In Sentora’s RLUSD vault on Morpho, 10.6 million FXRP backed $7.9 million of Ripple’s RLUSD stablecoin supplied in late September. Another 39% sits in Firelight as staked XRP, and about 8% provides liquidity on decentralized exchanges.
FXRP is also travelling. Because it is issued as a LayerZero omnichain token, it can move to other networks, and off-Flare FXRP in DeFi climbed from about 4 million on July 9 to about 20 million in October. It now reaches seven chains: Ethereum, Base, BNB Chain, Monad, Katana, HyperEVM and HyperCore. In January it became the first XRP spot market on Hyperliquid, which had previously offered XRP only through perpetual futures.
That expansion cuts both ways for Flare. The report says part of the demand has moved to chains with deeper credit markets, and trading or lending FXRP generates no protocol revenue for Flare itself. The fee comes at minting.
The numbers also face an incentive test. Flare spent 2.2 billion FLR on its FAssets incentive program between July 2025 and July 2026. FXRP in DeFi peaked at 142 million in May and has slipped about 5% since rewards ended. DefiLlama treats that hold as a sign of real demand, though a few months is a short window to judge it.
The second half of the report covers Flare’s pitch as a data network. Governance proposal FIP.16, approved in April with 98.06% of the vote, cut annual inflation to 3% in May and created FIRE, a pool that collects protocol revenue to reduce FLR supply. Fees from the Flare Data Connector, which verifies events on other blockchains, are now FIRE’s fastest-growing source at 45% of the total. A July hard fork weighted direct staking five times more heavily than delegation, and staked FLR rose from about 32% of the total in April to roughly half.
The gap between revenue and issuance is still wide. At $0.0067 per FLR, DefiLlama values annual issuance at about $18 million, against roughly $154,000 in token burns. The report concludes the fee system needs far more activity before it offsets inflation.
The most ambitious piece is Flare Confidential Compute, live since July on Songbird, the canary network where Flare tries features with real value before mainnet. It runs private data inside secure hardware enclaves and posts only a signed result onchain. The first use case checks reserves for Hex Trust’s USDX stablecoin. Hex Trust supplies a public reserves figure and a private cash figure, the enclave compares the total with USDX supply, and the chain learns only whether the coin is backed 1:1 or better. DefiLlama says the product could become “closer to an oracle primitive for private data” if more applications follow.
The report is candid about the limits. The system proves that approved code ran on the inputs it was given, not that those inputs are true, so the cash figure still rests on Hex Trust. During the bootstrap phase, the enclaves run on Google Cloud and are operated by the Flare Foundation.
The next milestones are Confidential Compute on Flare mainnet, FBTC for Bitcoin holders and FAssets v2. None is live yet. Together they will show whether Flare’s data layer can earn its keep beyond XRP. DefiLlama’s page does not say whether Flare commissioned the research; Flare distributed the findings in its own press release.
