XRP Staking: Axelar Network Signals New Asset

What to Know:

• Axelar Network is considering allowing its validators to stake XRP to secure the network and earn rewards.
• This move follows Axelar’s earlier integration of XRP through a partnership with Midas for the mXRP liquid staking token, addressing the lack of native staking on the XRP Ledger.
• Institutional interest in yield-bearing XRP products is growing, potentially attracting more liquidity and increasing XRP’s utility in DeFi.

The DeFi landscape is constantly evolving, with networks seeking to enhance their offerings by integrating popular digital assets. Axelar Network, known for its cross-chain communication capabilities, is reportedly planning to expand its support for XRP by introducing the token as a staking asset for validators within its ecosystem. This move could provide XRP holders with new avenues for generating yield and further integrate XRP into the broader DeFi ecosystem.

Axelar’s Potential XRP Staking Initiative

According to a recent disclosure by Eri, a prominent figure in the XRP community, Axelar is considering allowing validators to stake XRP as part of its network security framework. This initiative would enable validators to stake XRP to help secure the Axelar network while earning rewards. While Axelar has not yet made an official announcement, the move aligns with the project’s broader effort to “double down” on XRP, suggesting a deeper commitment to the XRP ecosystem.

Prior Support for XRP

Axelar’s interest in XRP isn’t new. Earlier this year, the project partnered with Midas to launch the liquid staking token mXRP, allowing users to swap their XRP for mXRP and access yield-bearing opportunities with returns of up to 10% APY.

This prior support demonstrates Axelar’s familiarity with the XRP community and its willingness to explore XRP-based DeFi use cases, potentially laying the groundwork for the new staking initiative.

XRP Staking and Yield-Bearing Initiatives

The XRP Ledger (XRPL) does not natively support staking, which has historically limited XRP’s participation in the DeFi landscape. In response, the community has been exploring ways to introduce staking on XRPL, including discussions within Ripple’s development arm, RippleX. Other networks have also stepped in to provide staking opportunities for XRP holders. Flare Networks, for example, rolled out low-risk staking opportunities earlier this year. Cardano founder Charles Hoskinson has also expressed interest in providing higher-yield opportunities for the XRP community, suggesting a significant untapped DeFi opportunity within the XRP ecosystem.

Institutional Interest and Market Implications

The potential for XRP staking on Axelar, along with other yield-bearing initiatives, could attract increased institutional interest in XRP. By providing a means to earn rewards on XRP holdings, these initiatives could incentivize institutions to allocate capital to XRP, potentially leading to increased liquidity and price appreciation. Moreover, the integration of XRP into DeFi platforms like Axelar could enhance its utility and further solidify its position in the digital asset market. The regulatory posture surrounding XRP, especially following Ripple’s legal victories, may also contribute to increased institutional confidence.

Derivatives and ETF Considerations

As XRP’s DeFi landscape expands, the demand for XRP derivatives and potentially even an XRP ETF could increase. The availability of staking and yield-bearing opportunities could make XRP more attractive to institutional investors seeking to generate returns through sophisticated investment strategies. However, the development of these products will likely depend on regulatory clarity and the continued growth of the XRP ecosystem. The mechanics of an XRP ETF, including custody solutions and market maker participation, would need to be carefully considered to ensure smooth operation and investor protection.

Conclusion

Axelar Network’s potential move to allow XRP staking for validators is a significant development for the XRP community. By addressing the lack of native staking on the XRP Ledger, Axelar could provide XRP holders with new opportunities to earn rewards and participate in the DeFi ecosystem. This initiative, along with other yield-bearing opportunities, may attract increased institutional interest in XRP, potentially leading to greater liquidity and utility for the digital asset.

Related: XRP Weakens: Targets Next Support Level

Source: Original article