XRP Ledger’s EVM Sidechain Enters DeFi as EramXRP Debuts With 8% Yields

Midas has partnered with Interop Labs and Axelar to launch a cutting-edge tokenized yield product, mXRP, the flagship product that integrates with XRP Ledger’s EVM sidechain.

According to an announcement by the Axelar Network, the new product, a liquid staking token, will enhance the role of XRP in decentralized finance (DeFi) and enable token holders to earn yields of up to 8%.

Use Idle XRP as Collateral

The launch of the tokenized yield product mXRP aligns with an ongoing initiative to enhance XRP’s utility in DeFi, while also expanding its use cases.  Pundits expect the liquid staking token to help turn around and estimate over $180 billion worth of XRP, making it a yield-bearing crypto asset that users can access via decentralized finance (DeFi) protocols.

Read also: How DeFi And Financial Inclusion Are Empowering Access Across The Globe

The tokenized yield product mXRP will enable users to deposit their idle XRP tokens as collateral into a tokenized certificate that generates an ERC20 token tracking market-neutral strategies, such as market making and liquidity provision.

The plan will be managed by a third-party asset manager and is expected to bear yields of between 6% and 8%. It is also projected that integrating the liquid staking token with DeFi applications, such as lending markets and native platforms on the XRP Ledger EVM ecosystem, will bring additional returns.

Broaden XRP’s Utility in DeFi

While Midas will be responsible for handling the structural and infrastructural issues associated with the tokenized yield product mXRP, Axelar Network will be responsible for bridging the XRP token into the protocol. Axelar will play a crucial role in connecting the XRP Ledger with over 80 blockchains, thereby increasing the accessibility of the liquid staking tokens.

The projected broad integration aims to ensure that the tokenized yield product mXRP functions seamlessly with various decentralized finance (DeFi) ecosystems, thereby broadening XRP’s utility.

Read also: XRP Price Prediction Shaken as Pullback Overshadows Record ETF Launch

Axelar Network observed that the low utilization of XRP within the DeFi ecosystem necessitated native yield products, noting that XRP’s market capitalization was currently underutilized due to the existing yield products’ inability to scale effectively. Georgios Vlachos, co-founder of Axelar protocol and director at Axelar Foundation, stated:

“Axelar is the Gateway to Onchain Finance […] by connecting the XRP Ledger to the world of DeFi for the first time, we are enabling compelling use cases, including tokenization and trading integrations. The mXRP token demonstrates the power of Axelar’s platform to deliver real-world applications, with security and configurability built in.”

The tokenized yield product mXRP will address the existing challenges by providing a liquid, scalable, and durable yield option using the new liquid staking token.

Conclusion

The launch of tokenized yield product mXRP comes hot on the heels of the introduction of the first XRP-backed stablecoin, highlighting a deliberate move to promote XRP’s utility in DeFi. The two developments could go a long way in addressing limitations that have always bedeviled yield generation and composability within the decentralized finance world.

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Summary

• Midas has launched a tokenized yield product, mXRP, in partnership with Axelar and Interop Labs to enhance XRP’s utility in the decentralized finance (DeFi) space.
• The liquid staking token will offer yields of up to 8% via exposure to on-chain and off-chain strategies.
• The token has been launched on the XRPL EVM and fully integrates it into the DeFi ecosystem.

Glossary to Key Terms

XRP: A digital currency that facilitates fast, low-cost cross-border payments and acts as a bridge currency for Ripple

DeFi: Decentralized finance, an emerging blockchain-based peer-to-peer system attempting to remove third parties and centralized institutions from financial transactions.

Liquid staking token: A type of cryptocurrency token that represents staked assets on a blockchain network, particularly in Proof-of-Stake (PoS) systems.

Yield: In cryptocurrency, ”yield” refers to the return or profit generated from holding digital assets.

Frequently Asked Questions about DeFi

What is DeFi?

Decentralized finance is a financial ecosystem built on the Ethereum blockchain network, featuring various protocols and platforms.

What are the essential benefits of DeFi?

The primary purpose is to eliminate fees charged by centralized financial institutions, empowering individuals to engage in lending, borrowing, and trading directly with one another.

What are the five pillars of DeFi?

DeFi is based on the following five pillars: Lending, borrowing, decentralized exchanges, Insurance, and margin.

What is the biggest problem in DeFi?

Security is the biggest concern in DeFi. The openness of the ecosystem and the complexity of smart contracts leave room for hackers to identify potential vulnerabilities that can be exploited.

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