Here’s Why 13% of XRP Supply Could Get Locked and Trigger a Major Supply Shock

A new discussion inside the XRP community is getting louder, and it’s all about supply. Digital Asset Investor (DAI), a well-known XRP supporter, thinks as much as 13% of the circulating XRP could soon be locked away, creating a serious supply crunch that might push prices higher in the future.

At the heart of this story are two ambitious DeFi projects: mXRP from Axelar Network and FXRP from Flare.

In a recent chat with Eleanor Terrett from Crypto in America, Georgios Vlachos, co-founder of the Axelar Foundation, said their success would mean managing $10 billion worth of XRP. That’s about 5% of the total supply.

Not long after, Hugo Philion, Flare’s co-founder, told the Paul Barron Show that his team wants 5 billion XRP secured on the Flare network by mid-2026.

If both of these big goals are met, around 8 billion XRP, roughly 13% of what’s currently in circulation, could end up locked and out of everyday trading.

Right now, these numbers are still far off. The mXRP product, launched at XRP Seoul 2025, holds only 3.85 million XRP at the moment, with about 2.78 million on the EVM sidechain. That’s a tiny 0.006% of the supply, nowhere near the $10 billion target

Still, the project is just getting started, which means there’s time for adoption to grow if the idea catches on.

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…

— TheCryptoBasic (@thecryptobasic) September 24, 2025

Furthermore, this potential supply squeeze comes as XRP exchange balances are already falling. According to TheCryptoBasic, Coinbase’s holdings dropped from 970 million XRP in June to just 32 million by September 20, and the exchange hasn’t explained the move.

A huge portion of XRP is also tied up elsewhere. Ripple controls 37.3 billion XRP in escrow and another 3.5 billion in liquid form. Co-founders Chris Larsen and Arthur Britto hold 2.3 billion and 1.3 billion, respectively. Together, these big players control around 44% of all XRP ever created.

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Institutional investors are adding to the picture too. Purpose ETF already owns 29.6 million XRP, and the Canadian fund 3iQ has 45 million. Market watchers think that banks like JPMorgan, Wells Fargo, and Goldman Sachs, along with possible spot XRP ETFs, could lock away billions more over time.

What It Means for XRP Price

If Axelar and Flare get anywhere close to their goals and institutions keep buying, a large slice of XRP could stay off the market. When supply shrinks and demand keeps rising, prices usually feel upward pressure.

It’s early, and these targets are still big dreams, but DAI’s point is clear. mXRP and FXRP could help create a real supply shock, and with exchange reserves already shrinking and institutional demand growing, the next few years could get very interesting for XRP holders.

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