Flare’s Data Connector becomes its fastest-growing revenue source as XRP capital goes to work
- About 129 million of the 145 million FXRP in circulation is deployed in DeFi, with lending accounting for 52% of deployed tokens.
- FXRP DeFi usage fell just 5% three months after Flare ended its 2.2 billion FLR incentive program, while cross-chain deployment expanded to Ethereum and Monad.
- Flare Data Connector fees now generate 45% of protocol revenue, while mainnet confidential computing and Bitcoin integration are key upcoming milestones.
A new report by DefiLlama Research has shown that nearly all the XRP that enter the Flare blockchain are being put to work in DeFi.
The report found that about 129 million of the 145 million FXRP tokens in circulation are deployed across DeFi protocols, with lending being the largest use.
Flare launched FXRP in September 2025 through its FAssets system. It is a 1:1 representation of XRP that lets holders lend, borrow, stake and trade without selling the underlying coin.
Flare, an EVM-compatible Layer 1 blockchain built around decentralized data infrastructure, announced the findings on Oct. 21. FXRP currently amounts to roughly 0.23% of circulating XRP per the report.
Where is the FXRP being put to work?
The report revealed that lending markets hold about 52% of deployed FXRP across Morpho and Kinetic on Flare, Morpho on Ethereum and Euler on Monad.
Most of these FXRP serve as collateral. They allow holders to borrow against their XRP instead of selling it.
In Sentora’s RLUSD vault on Morpho, 10.6 million FXRP was reportedly used to back $7.9 million of RLUSD supplied in late September. Firelight, a staking layer for XRP, holds another 39%, and exchange liquidity makes up the remaining 8%.
Flare partnered with Morpho and Mystic in February this year to launch modular lending. This enabled FXRP holders to borrow stablecoins and other assets against their tokens.
Is demand holding up without incentives?
Flare set aside 2.2 billion FLR tokens in incentives to attract liquidity to the platform. It ran this program for one year, from July 2025 to July 2026.
A major challenge with incentive programs is the decline in demand after the incentives end, and for Flare, it found out after it ended.
However, the decline was only 5% as of October, three months after the incentive ended. FXRP in DeFi is now around 129 million.
It reportedly peaked in May when the program was still on, standing at 142 million, and was around 136 million as of July 9.
The latest report by DefiLlama and Flare says that 95% of it stayed deployed.
About 20 million FXRP is now deployed outside Flare, which is a fivefold increase since July. Holders have moved tokens to Ethereum and Monad, where credit markets are deeper.
FXRP has now reached seven networks, which is seen as considerable growth for a token that was initially issued as a LayerZero OFT. In January, it gave Hyperliquid its first XRP spot market.
Stablecoin supply on the XRP Ledger has grown too. 21Shares Research, drawing on DefiLlama data, put the supply of Ripple’s RLUSD stablecoin at $1.56 billion by June 30, with 52% of it on the XRP Ledger, up from about 10% a year earlier.
How much is Flare’s data layer earning?
Beyond XRP, the report examines Flare’s data infrastructure. Since a governance change known as FIP.16 took effect, fees from the Flare Data Connector, which verifies events on other chains, have grown faster than any other protocol revenue source.
45% of the revenue that is flowing into Flare’s protocol revenue pool, which is known as FIRE, has been coming from the fees generated from the Data Connector.
However, that amount is still modest, as FIRE has collected about $50,000 so far. The report calls the mechanisms small relative to annual FLR issuance, which is worth around $18 million at current prices.
Staked FLR rose from about 32% to 46% of all staked or delegated FLR between April and August, after a July hard fork weighted direct staking more heavily.
The network’s next milestone is the Flare Confidential Compute (FCC), which lets smart contracts verify results drawn from private institutional data without exposing it.
It is already live on the Songbird canary network, where it supports proof of reserves for Hex Trust’s USDX stablecoin.
The report is optimistic on the potential of the FCC. It has been projected that the next steps to expand the reach of the product are deployment on Flare’s mainnet and more use cases.
It is said that the product would do for institutional information what Flare’s price oracle does for public prices.
Bitcoin integration is also on the network’s plan, and it already has a named product for that, FBTC. It says that this integration, the mainnet launch of confidential compute, and higher revenues from its protocol are the milestones that the public should be looking out for.
Achieving those milestones for Flare will show that the network can extend its infrastructure beyond XRP and support institutional DeFi.
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