A potential XRP supply squeeze may be brewing, and new insights from leading market watchers suggest that the impact on price could be significant. Crypto analyst Zach Rector has warned that the long-dismissed ”XRP supply shock” narrative is no longer just talk. As more XRP is locked, tokenized, and deployed in Decentralized Finance (DeFi) ecosystems, the available supply continues to tighten. XRP Supply Shock To Evolve From Meme To Market Reality Crypto analyst Zach Rector ignited discussions about XRP’s circulating supply this week after posting on X social media that the “XRP supply shock is not just a meme anymore.” Rector explained that while the concept once seemed exaggerated, developments within the Flare ecosystem are now turning it into a measurable market trend, where on-chain demand could limit liquidity over time. Related Reading: Famous Analyst Calls XRP The Ethereum Killer As Experts Predict What Comes Next Rector revealed that he recently minted 100 FXRP, adding to the 90 FXRP he created the previous week, to explore how XRP could generate yield with the Flare ecosystem without leaving the XRP Ledger. He emphasized that the altcoin’s growing role in DeFi is one of the key dynamics investors should watch as more assets are bridged and locked. Supporting this, Rector shared a Whale Alert report showing that 4,000,000 XRP, worth more than $11.21 million, had been locked in escrow in a Flare core vault linked to the XRP Ledger. He revealed that once XRP is locked, it is minted and represented as FXRP on the FlareNetworks, effectively removing it from active circulation while enabling yield generation. Rector disclosed that Flare’s Chief Executive Officer, Hugo Philion, previously stated that the company’s long-term target is to tokenize up to 5% of the total XRP supply within its network. Such a move could significantly impact liquidity and potentially create upward price pressure if demand for the cryptocurrency continues to climb. Following the analyst’s post, the Flare community on X responded positively, emphasizing that the network is creating new yield opportunities for XRP holders and driving ecosystem growth. Flare’s Expanding DeFi Role Through XRP In a separate update, FlareNetworks released a performance chart on X showing that FXRP activity and Total Value Locked (TVL) have been rising sharply since early September 2025. The chart indicates sustained growth in FXRP minting and redemption, signaling an accelerating participation across the network’s DeFi infrastructure. Related Reading: Analyst Says Be Concerned About XRP Price When This Starts Happening To 3-Day Candles Flare stated that each FXRP cap increase has triggered new waves of on-chain financial activity, gradually establishing the network as a significant influence in XRP’s DeFi adoption within the Ethereum Virtual Machine (EVM) ecosystem. Further analysis from MessariCrypto’s Pulse Report supports this trend. The report found that FXRP minting has surpassed 30 million tokens, with TVL climbing by more than 25% in recent weeks. Messari also highlighted how key features within the Flare ecosystem, including “FAssets incentives, USDT0_to liquidity, and the upcoming Firelightfi staking layer,” are transforming XRP from a non-productive asset into one capable of generating returns. Featured image from Adobe Stock, chart from Tradingview.com
