Digital Asset Investor (DAI), an XRP community figure, believes XRP could face a major supply crunch soon amid the ambitions from mXRP and FXRP.
Notably, his warning came on the back of the launch of mXRP, a yield-bearing project from Axelar Network. Following the launch, DAI called attention to two interviews that revealed how much XRP Axelar and Flare want to take out of circulation through their respective staking products.
Axelar and Flare Eye XRP Targets with mXRP and FXRP
In the most recent interview, Eleanor Terrett from Crypto in America asked Georgios Vlachos, co-founder and Director of the Axelar Foundation, what success would look like for the newly launched mXRP.
In response, Vlachos said if the team had to identify a single measure, it would be assets under management. According to him, the team wants to manage $10 billion worth of XRP, which equals about 5% of the circulating supply.
Meanwhile, the second interview came from the Paul Barron Show. During the interview, Flare’s co-founder, Hugo Philion, gave a similarly ambitious target. Specifically, when Barron asked how much FXRP he expected to unlock this year, Philion said he wanted to see 5 billion XRP secured on Flare by mid-2026.
Imminent Supply Shock?
After highlighting both interviews, DAI argued that there could be massive implications. Notably, if Axelar succeeds in locking 5% of the supply through mXRP and Flare reaches its goal of 5 billion XRP through FXRP, the total adds up to around 8 billion XRP.
For context, this figure equals about 13% of the current circulating supply. DAI suggested that just these two projects alone could contribute to the supply shock that most individuals in the community have been anticipating.
However, the goals remain ambitious at press time. For instance, the mXRP product, unveiled recently at XRP Seoul 2025, currently holds only 3.851 million XRP across the EVM Sidechain and the XRP Ledger, with most of the tokens, about 2.786 million on the sidechain.
This represents just a tiny fraction, about 0.006% of the XRP circulating supply, when compared to the project’s $10 billion target. Still, it is important to point out that mXRP is in its early stages, so the project has time to grow.
Collapsing Exchange Reserve and Reduced Liquid Supply
Meanwhile, DAI’s supply shock warning comes at a time when XRP balances on exchanges also appear to be shrinking.
Specifically, Coinbase’s XRP balance has dropped sharply in recent months. In June, the exchange held about 970 million XRP spread across 52 cold wallets. By Sept. 20, the balance had collapsed to just 32 million XRP sitting in two wallets.
The sharp decline has led to speculation within the community that exchange balances are drying up, though Coinbase has not explained the movements or responded to questions.
Also, other community members point out that a large part of the supply is already tied up. Analyst 24HrsCrypto recently noted that Ripple controls 37.3 billion XRP in escrow and another 3.5 billion in liquid form. Chris Larsen holds 2.3 billion, while Arthur Britto holds 1.3 billion. Together, these account for about 44.4 percent of all XRP in existence.
People don’t realize how little XRP is left.
Ripple escrow: 37.3B XRP (37.3%)
Ripple liquid: 3.5B (3.5%)
Chris Larsen: 2.3B (2.3%)
Arthur Britto: 1.3B (1.3%)That’s nearly 44.4% of supply already accounted for…
..and then you have look at institutions.
Purpose ETF already… pic.twitter.com/ExyK7OUEAa
— 𝟸𝟺𝙷𝚁𝚂𝙲𝚁𝚈𝙿𝚃𝙾 (@24hrscrypto1) September 22, 2025
He pointed out that institutional investors have also started building positions. For one, Purpose ETF owns 29.6 million XRP while Canadian manager 3iQ holds 45 million XRP. 24HrsCrypto estimated that retail investors probably own no more than 15% of the supply.
The market pundit added that once major banks like JPMorgan, Wells Fargo, and Goldman Sachs enter the market, billions more XRP could end up in cold storage. Moreover, spot XRP ETFs, which could launch later this year, may also lock up some of the tokens in supply.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
