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The crypto world is constantly evolving, and XRP holders have long awaited ways to earn passive income without selling their tokens. Traditionally, XRP did not offer any native staking or yield-earning mechanism due to the way the XRP Ledger (XRPL) is designed. But that’s changing with mXRP — a groundbreaking liquid staking token that lets XRP holders earn yield while maintaining liquidity.
This article breaks down what mXRP is, how it works, how you can earn up to 8% yield (and potentially more), and what risks to consider before getting involved.
What Is mXRP?
At its core, mXRP is a liquid, yield-bearing version of XRP that allows holders to earn passive income without locking up their assets permanently. It was introduced through a collaboration between Midas Crypto, Axelar Network, and Interop Labs on the XRPL EVM — an Ethereum-compatible sidechain connected to the XRP Ledger.
Unlike the traditional XRP token, which earns no rewards simply by holding it, mXRP acts as a derivative that:
Is minted 1:1 against your deposited XRP.
Remains fully liquid — meaning you can trade, transfer, or use it in decentralized finance (DeFi) apps.
Earns target yields of between 6–8% APY, with some sources suggesting even higher returns through advanced strategies.
mXRP is the first DeFi product of its kind on the XRP Ledger, turning idle XRP into a productive asset while preserving flexibility for the holder.
Why Was mXRP Created?
For years, the XRPL did not offer any built-in staking rewards because its consensus mechanism isn’t based on Proof-of-Stake (PoS). This meant that XRP holders couldn’t earn passive income like users of Ethereum, Solana, or other PoS networks could.
mXRP was created to solve this problem by:
Bringing yield opportunities to XRP holders without traditional staking.
Integrating the XRPL with broader DeFi ecosystems via the XRPL EVM and Axelar bridge.
Making excess XRP supply productive by funneling it into yield-generating strategies managed by professionals.
The result? A way to earn income with XRP while keeping your crypto flexible and usable in other financial applications.
How Does mXRP Work? Step-by-Step
Here’s a simplified breakdown of how you can earn yield with mXRP:
1. Bridge Your XRP
You start by sending your XRP from the main XRP Ledger to the XRPL EVM sidechain using the Axelar bridge. This is necessary because the yield-earning functionality lives on the EVM sidechain, not on the core XRPL itself.
2. Mint mXRP Tokens
Once your XRP is on the XRPL EVM, you deposit it into the mXRP smart contract. In return, you receive mXRP tokens at a 1:1 ratio — meaning 1 XRP deposited = 1 mXRP minted.
3. Hold and Earn Yield
mXRP earns yield through a combination of on-chain and off-chain strategies (like market-making, liquidity provision, and algorithmic trading) managed by professional partners. The yield is reflected in the changing redemption rate between mXRP and native XRP. As more yield is earned, each mXRP token represents more value than before.
4. Redeem or Use Your mXRP
Need access to your original XRP and earnings? mXRP is fully redeemable — you can trade it, use it in DeFi protocols like lending or liquidity pools, or simply burn it to reclaim your underlying XRP plus any accrued yield.
How Much Yield Can You Earn?
The headline figures around mXRP yield typically target:
6–8% APY for most holders.
Some institutional frameworks suggest up to 10% APY under certain conditions, though this is variable and not guaranteed.
Announcement from Axelar
These rates are competitive with many PoS staking rewards on other networks — and superior considering that mXRP doesn’t lock your assets. Still, remember that returns depend on market conditions and strategy performance.
Benefits of Using mXRP
1. Passive Income Without Selling XRP
Earn yield without needing to trade or liquidate your tokens.
2. Retain Liquidity
mXRP can be used across DeFi platforms, unlike traditional staking which often involves lock-up periods.
3. Composability in DeFi
Use mXRP in things like lending markets, LPs, and other yield-enhancing DeFi strategies.
4. Unlock Idle Capital
A large portion of XRP supply has historically been dormant. mXRP gives holders new ways to put that capital to work.
Risks to Consider
Like all crypto products, mXRP comes with risks that you should understand before participating:
Bridge Risk: Moving assets between chains (via Axelar) introduces potential vulnerabilities.
Smart Contract Risk: Bugs or exploits in the underlying smart contracts could impact your funds.
Custodial & Strategy Risk: Yield depends on third-party managers and sophisticated strategies.
Yield Variability: Returns aren’t guaranteed and can fluctuate.
Regulatory Uncertainty: Tokenized yield products may face future regulatory developments.
Always do your own research and consider your risk tolerance before depositing assets.
Frequently Asked Questions (FAQ)
What is the main purpose of mXRP?
mXRP was created to allow XRP holders to earn yield on their tokens while keeping them liquid and usable in DeFi applications.
How does mXRP earn yield?
Yield is generated through managed strategies like liquidity provision and market-making, deployed by professional partners on behalf of mXRP holders.
Is my original XRP safe when minting mXRP?
Your XRP is collateralized on the XRPL EVM sidechain, but like all crypto products, it carries smart contract and bridge risk.
Can I redeem mXRP for my XRP?
Yes — mXRP can be redeemed for your original XRP plus any accrued yield at any time.
Are the yields guaranteed?
No. Yield rates are target estimates and can vary based on market conditions and strategy performance.
Conclusion
mXRP is a major leap forward for the XRP ecosystem, providing a practical path to earning passive income without sacrificing liquidity. By transforming dormant XRP into a productive asset, mXRP unlocks new financial opportunities for holders and helps bridge the gap between traditional crypto holdings and modern DeFi utilities.
